FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

NATURAL RESOURCES DEFENSE 

COUNCIL; CALIFORNIA TROUT;

BAYKEEPER & IT’S DELTAKEEPER

CHAPTER; FRIENDS OF THE RIVER;

THE BAY INSTITUTE, all non-profit

organizations,

Plaintiffs-Appellants,

and

METROPOLITAN WATER DISTRICT OF

SOUTHERN CALIFORNIA, Plaintiff in

Related Case,

Plaintiff,

v. 

KENNETH LEE SALAZAR, in his

official capacity as Secretary of

the Interior; SAM D. HAMILTON, in

his official capacity as Director of

the U.S. Fish and Wildlife

Service; MICHAEL J. CONNOR, in

his official capacity as

Commissioner of the U.S. Bureau

of Reclamation; ANDERSONCOTTONWOOD IRRIGATION DISTRICT;

PACIFIC REALTY ASSOCIATES, LP;

RECLAMATION DISTRICT 1004; 

8167
BEVERLY F. ANDREOTTI; BANTA- 

CARBONA IRRIGATION DISTRICT;

PATTERSON IRRIGATION DISTRICT;

WEST SIDE IRRIGATION DISTRICT;

BYRON BETHANY IRRIGATION

DISTRICT; CARTER MUTUAL WATER

COMPANY; HOWALD FARMS, INC.;

MAXWELL IRRIGATION DISTRICT;

MERIDIAN FARMS WATER COMPANY;

OJI BROTHERS FARM, INC.; HENRY

D. RICHTER; SUTTER MUTUAL

WATER CO.; TISDALE

IRRIGATION AND DRAINAGE

COMPANY; WINDSWEPT LAND AND

LIVESTOCK COMPANY; CITY OF

REDDING; COELHO FAMILY TRUST; 

EAGLE FIELD WATER DISTRICT;

MERCY SPRINGS WATER DISTRICT;

ORO LOMA WATER DISTRICT;

CONAWAY CONSERVANCY GROUP;

DEL PUERTO WATER DISTRICT;

WEST STANISLAUS IRRIGATION

DISTRICT; FRESNO SLOUGH WATER

DISTRICT; JAMES IRRIGATION

DISTRICT; TRANQUILITY IRRIGATION

DISTRICT; CHRISTO D. BARDIS;

ABDUL RAUF; TAHMINA RAUF;

SACRAMENTO RIVER RANCH, LLC;

FRED TENHUNFELD; FAMILY FARM

ALLIANCE,

Defendants-Appellees, 

8168 NRDC v. SALAZAR
SAN LUIS & DELTA-MENDOTA 

WATER AUTHORITY; WESTLANDS

WATER DISTRICT; CALIFORNIA FARM

BUREAU FEDERATION; STATE WATER

CONTRACTORS; CALIFORNIA

DEPARTMENT OF WATER RESOURCES;

GLENN-COLUSA IRRIGATION No. 09-17661

DISTRICT; NATOMAS CENTRAL D.C. No. MUTUAL WATER COMPANY; PELGER  1:05-cv-01207- MUTUAL WATER COMPANY;

OWW- GSA PLEASANT GROVE-VERONA MUTUAL

WATER COMPANY; RECLAMATION OPINION

DISTRICT 108; RIVER GARDEN

FARMS; PRINCETON-CODORA-GLENN

IRRIGATION DISTRICT; PROVIDENT

IRRIGATION DISTRICT; KERN COUNTY

WATER AGENCY,

Defendant-intervenors-Appellees. 

Appeal from the United States District Court

for the Eastern District of California

Oliver W. Wanger, Senior District Judge, Presiding

Argued and Submitted

May 9, 2011—San Francisco, California

Filed July 17, 2012

Before: Procter Hug, Jr. and Richard A. Paez,

Circuit Judges, and Liam O’Grady, District Judge.*

*The Honorable Liam O’Grady, District Judge for the U.S. District

Court for Eastern Virginia, Alexandria, sitting by designation. 

NRDC v. SALAZAR 8169
Opinion by Judge Hug;

Dissent by Judge Paez

8170 NRDC v. SALAZAR
COUNSEL

Katherine Poole, Senior Attorney, Natural Resources Defense

Council, San Francisco, California; Hamilton Candee and

NRDC v. SALAZAR 8171
Barbara J. Chisholm, Altshuler Berzon LLP, for the plaintiffs-appellants.

Andrew C. Mergen and Robert H. Oakley, Attorneys, Environment & Natural Resources Division, Department of Justice, Washington, D.C., for the defendants-appellees.

Daniel J. O’Hanlon, Kronick Moskovitz Tiedemann & Girard,

PC, Sacramento, California; Stuart L. Somach and Andrew

M. Hitchings, Somach Simmons & Dunn, Sacramento, California; Steven P. Saxton, Downey Brand LLP, Sacramento,

California, for the defendant-intervenors-appellees.

OPINION

HUG, Circuit Judge:

In this appeal, we address whether the renewal of forty-one

water supply contracts by the United States Bureau of Reclamation violates § 7(a)(2) of the Endangered Species Act, 16

U.S.C. § 1536(a)(2) and illegally threatens the existence of

the delta smelt. We conclude that it does not, and we affirm

the judgment of the district court. 

I. BACKGROUND 

A. FACTUAL BACKGROUND

The delta smelt is a small fish endemic to the San Joaquin

and Sacramento Rivers Delta Estuary which was declared

endangered by the United States Fish and Wildlife Service

under the Endangered Species Act in 1993. Though previously abundant, the population of the delta smelt has diminished markedly in the last several decades. “The delta smelt

presently has no commercial value, but it was commercially

harvested as bait in the past.” San Luis & Delta-Mendota

Water Auth. v. Salazar, 638 F.3d 1163, 1167 (9th Cir. 2011).

8172 NRDC v. SALAZAR
Plaintiffs, several conservation groups, argue that in 2005

the United States Bureau of Reclamation (“Bureau”) renewed

forty-one water service contracts with various water users

without conducting an adequate consultation under § 7(a)(2)

of the Endangered Species Act and that the contracts jeopardize the existence of the delta smelt. The contracts at issue fall

into two groups: (1) users who obtain water from the DeltaMendota Canal (“DMC Contractors”); and (2) parties who

claim to hold water rights senior to those held by the Bureau

with regard to the Central Valley Project and who previously

entered into settlement contracts with the Bureau (“Settlement

Contractors”).

Generally, the Bureau is a federal water management

agency which operates the Central Valley Project (“CVP”).

The CVP is a network of dams, reservoirs, and pumping facilities which regulates the flow of water in the San Joaquin and

Sacramento Rivers. California’s State Water Project (“SWP”)

operates the same watershed as the CVP and both offices convey water by pumping water from the two rivers. The SWP

consists of dams, canals, and pumping plants and is “the state

analogue to the Central Valley Project.” Sierra Club v.

Andrus, 610 F.2d 581, 586 (9th Cir. 1979), rev’d on other

grounds, California v. Sierra Club, 451 U.S. 287, 290-91

(1981). 

The Bureau and SWP have coordinated management of

CVP. The joint effort began in the 1930s when the Bureau

assumed control of it because California could not finance the

project. The Bureau had to obtain water rights under state law

to operate CVP and a dispute arose regarding the priority of

pre-project water rights. Under California law, a senior holder

of water rights has the right “to fulfill his needs before a

junior appropriator is entitled to use any water.” United States

v. State Water Resources Control Bd., 182 Cal. App. 3d 82,

102 (Cal. Ct. App. 1986). The California Water Rights Board

held hearings on the matter and issued a decision allowing the

Bureau to use CVP water if it first addressed the issue of the

NRDC v. SALAZAR 8173
holders asserting senior water rights. The Board recognized

that senior water rights existed, though undefined, and

required a settlement. 

In 1964, the Bureau and those asserting senior water rights

entered into 145 settlement contracts for 40-year terms. The

contracts did not resolve the seniority claims, but guaranteed

Settlement Contractors a certain amount of “base water”

annually without any fee and other “project water” for which

they would pay a fee to receive. The “base water” could only

be reduced by 25% in very dry years. 

The Bureau also contracted with a coalition of water service contractors who obtained water from the Delta-Mendota

Canal, the DMC Contractors. These contracts provided for

water delivery to the DMC Contractors annually which the

contractors paid the Bureau to receive. Like the Settlement

Contracts, these contracts were also long-term water supply

contracts. 

B. STATUTORY FRAMEWORK

The Endangered Species Act (“ESA”) “has both substantive and procedural provisions designed to protect endangered

species and their habitat.” American Rivers v. Nat’l Marine

Fisheries Serv., 126 F.3d 1118, 1121 (9th Cir. 1997). Under

§ 7(a)(2) of the ESA, federal agencies are required to “insure

that any action authorized, funded, or carried out by such

agency . . . is not likely to jeopardize the continued existence

of any endangered species or threatened species or result in

the destruction or adverse modification of habitat of such species.” 16 U.S.C. § 1536(a)(2). An agency which proposes the

action must determine whether its action may affect the listed

species or critical habitat and present its conclusions in a biological assessment. 16 U.S.C. § 1536(c)(1); 50 C.F.R.

§ 402.12. If the agency determines that its action will have no

effect, consultation is not required. 50 C.F.R. § 402.14. If it

finds its proposed action may affect a listed species or critical

8174 NRDC v. SALAZAR
habitat, it must formally or informally consult with, in this

case, the United States Fish and Wildlife Service (“Service”).

American Rivers, 126 F.3d at 1122.

If the acting agency or consulting agency determines that

the proposed action is likely to adversely affect a listed species or critical habitat, it must engage in a formal consultation.

50 C.F.R. §§ 402.13, 402.14. In a formal consultation, the

consulting agency (the Service) issues a biological opinion

stating whether the action is likely to jeopardize such species

or habitat. 16 U.S.C. § 1536(b); 50 C.F.R. § 402.14. If it finds

jeopardy is likely, then the acting agency (the Bureau) may

suggest reasonable and prudent alternatives to be employed in

order to ensure that the listed species or critical habitat is not

put in jeopardy. 16 U.S.C. § 1536(b). The requirements to

engage in consultation only apply to agency actions “in which

there is discretionary Federal involvement or control.” 50

C.F.R. § 402.03. 

C. PROCEDURAL HISTORY

In 2003, the Bureau prepared a biological assessment

regarding the affect that the contract renewals would impose

on the delta smelt and also requested a consultation with the

Service. The Service prepared a biological opinion (“2004

opinion”) addressing whether the contract renewals would

likely adversely affect a listed species or critical habitat. The

Service stated in its 2004 opinion that the Bureau’s proposed

action was not likely to threaten the delta smelt. Shortly thereafter, because of an intervening court decision, the Service

issued a new biological opinion in 2005 (“2005 opinion”)

which reached the same conclusion. 

As the Service’s opinions were issued, the contracts at issue

in this case had expired or were nearing expiration. Because

the Bureau and the Service determined that the contract

renewals would not adversely affect the delta smelt, in 2004

and 2005 the Bureau renewed 28 contracts with the SettleNRDC v. SALAZAR 8175
ment Contractors not to exceed 40-years and 13 contracts

with the DMC Contractors for 25-year terms.

In 2005, plaintiffs in the instant case filed suit against the

government alleging that it violated § 7 of the ESA based on

the Service’s 2004 opinion. The Service then issued its new

2005 opinion and plaintiffs filed another complaint referring

to the 2005 opinion. In reviewing the 2005 opinion, the district court held that it was unlawful because it failed to adequately consider the impacts to the delta smelt’s critical

habitat, did not rely on the best available scientific information, and did not include mandatory mitigation measures to

protect the delta smelt. The district court remanded the 2005

opinion without vacatur and ordered the Bureau and the Service to reconsult on the effects of the CVP and SWP operation on the delta smelt. On December 14, 2007, interim

measures were imposed by the court and were set to expire

automatically on the issuance of a new biological opinion by

the Service. A new opinion was filed by the Service in

December 2008.

Plaintiffs filed another complaint against the government

arguing that the Bureau had violated its legal obligations

under § 7(a)(2) of the ESA by renewing the DMC contracts

and Settlement Contracts. Each party then moved for summary judgment. The district court granted summary judgment

for defendants, finding that plaintiffs lacked standing to challenge the DMC contracts and that the plaintiffs’ claims

against the Settlement Contractors failed because the contracts were not discretionary and were thus exempted from

§ 7(a)(2) compliance. 

In 2008, the Bureau completed a new biological assessment

and the Service issued a new biological opinion (“2008 opinion”). In that opinion, the Service found that the CVP and

SWP operations were likely to threaten the delta smelt and

identified “reasonable and prudent alternatives” to avoid such

jeopardy. 

8176 NRDC v. SALAZAR
II. ANALYSIS

A. STANDARD OF REVIEW

This court reviews a district court’s grant of summary judgment de novo. Butte Envtl. Council v. U.S. Army Corps of

Engineers, 620 F.3d 936, 945 (9th Cir. 2010). “Mootness, a

question of law, is reviewed de novo.” Tinoqui-Chalola

Council of Kitanemuk and Yowlumne Tejon Indians v. U.S.

Dep’t of Energy, 232 F.3d 1300, 1303 (9th Cir. 2000). Standing to challenge renewal of the DMC contracts is a legal question also reviewed de novo. Salmon Spawning & Recovery

Alliance v. Gutierrez, 545 F.3d 1220, 1224-25 (9th Cir. 2008).

B. MOOTNESS

Federal defendants and DMC Contractors argue that the

issuance of the 2008 opinion by the Service eliminates the

“case or controversy” requirement for federal jurisdiction and

makes this appeal moot. A federal court’s jurisdiction is limited to cases or controversies. U.S. Const., Art. III, § 2; Powell v. McCormack, 395 U.S. 486, 496 n.7 (1969). Federal

courts do not have jurisdiction to review a case when no case

or controversy exists. Foster v. Carson, 347 F.3d 742, 745

(9th Cir. 2003). Issuance of a superceding biological opinion

moots a legal challenge to a prior biological opinion. Forest

Guardians v. U.S. Forest Serv., 329 F.3d 1089, 1096 (9th Cir.

2003); American Rivers, 126 F.3d at 1123-24; Idaho Dep’t of

Fish & Game v. Nat’l Marine Fisheries Serv., 56 F.3d 1071,

1074 (9th Cir. 1995). 

[1] In this case, the issues before the court are not moot

because although a new 2008 opinion was issued, parts of that

2008 opinion have been held unlawful by the district court in

San Luis & Delta-Mendota Water Authority v. Salazar, 760 F.

Supp. 2d 855 (E.D. Cal. 2010) (holding that the Service’s reliance on raw salvage numbers to set river flow limits violated

ESA and that its conclusion that projects contributed to

NRDC v. SALAZAR 8177
impacts on predation and microcystis on delta smelt was arbitrary and capricious). Unlike previous cases that this court has

addressed where a new superceding opinion clearly replaced

the old opinion, in this case we have ongoing litigation

regarding the validity of the 2008 opinion and a federal court

which has held that parts of the 2008 opinion violate the ESA.

Moreover, it is unclear whether the 2008 opinion specifically

considered the impact of the forty-one contracts on CVP operation. Because the 2008 opinion has been held, in part, unlawful, and it is unclear if the contracts at issue were considered

in that opinion, this case is not moot on appeal. 

C. STANDING

Plaintiffs argue that the district court erred in holding that

they did not have standing to challenge the DMC contracts.

To invoke the jurisdiction of the federal courts, a plaintiff

must have Article III standing. Salmon Spawning & Recovery

Alliance, 545 F.3d at 1224-25. To establish Article III standing, a plaintiff must show that: “(1) he or she has suffered an

injury in fact that is concrete and particularized, and actual or

imminent; (2) the injury is fairly traceable to the challenged

conduct; and (3) the injury is likely to be redressed by a favorable court decision.” Id. at 1225. If a plaintiff asserts a procedural injury, he must show that the procedures are designed

to protect a concrete threatened interest and, once shown, his

burden for showing causation and redressability is lessened.

Id. at 1226. In that case, plaintiffs “must show only that they

have a procedural right that, if exercised, could protect their

concrete interests.” Id. (quoting Defenders of Wildlife v. U.S.

E.P.A., 420 F.3d 946, 957 (9th Cir. 2005), overruled on other

grounds by Nat’l Ass’n of Home Builders v. Defenders of

Wildlife, 551 U.S. 644 (2007)).

[2] In this case, the district court properly held that plaintiffs do not have standing to challenge the DMC contracts.

Plaintiffs’ assertion that the DMC contracts are based on an

improper biological opinion is an assertion of a procedural

8178 NRDC v. SALAZAR
violation. See Defenders of Wildlife, 420 F.3d at 957 (claim

asserting an inadequate consultation between the Environmental Protection Agency and Fish and Wildlife Service

asserts a procedural violation). Plaintiffs satisfy the injury-infact requirement by their assertion that they believe that the

Bureau has overcommitted water under the contracts which

will harm the delta smelt. See Salmon Spawning & Recovery

Alliance, 545 F.3d at 1225-26. However, plaintiffs fail to

establish a causal connection between the threatened injury

and the Bureau’s action because the DMC contracts include

a shortage provision. The shortage provision expressly allows

the Bureau to take any action to meet its legal obligations,

which includes not delivering water to DMC Contractors if it

is necessary in order to comply with § 7(a)(2) of the ESA.

The DMC contract terms, therefore, expressly require that

water delivery be subject to the requirements of Federal law

and that the Bureau may discontinue or reduce the quantity of

water delivered to the DMC Contractors. The threatened

injury, i.e., jeopardy to the delta smelt, would not be traceable

to the contract renewals because such contracts expressly

allow for § 7(a)(2) compliance. With no threatened injury

there is nothing to redress. Even under a substantive claim

analysis for standing, which imposes a higher burden than a

procedural analysis, plaintiffs’ claim fails because they cannot

show causation. See Warth v. Seldin, 422 U.S. 490, 506-08

(1975) (facts asserted failed to show causation for Article III

standing). Thus, the district court properly determined that

plaintiffs lack standing to challenge the DMC contracts under

both a procedural and a substantive claim analysis. 

D. NON-DISCRETIONARY CONTRACTS

[3] Plaintiffs argue that the district court erred in holding

that their claims as to the Settlement Contracts fail because

those contracts do not require compliance with § 7(a)(2) of

the ESA. Section 7(a)(2) of the ESA only applies to federal

agency action “in which there is discretionary Federal

involvement or control.” Nat’l Ass’n of Home Builders v.

NRDC v. SALAZAR 8179
Defenders of Wildlife, 551 U.S. 644, 666 (2007) (“Home

Builders”) (quoting 50 C.F.R. § 402.03). In Home Builders,

the Supreme Court held § 7 did not apply to the Environmental Protection Agency’s (“EPA”) approval of an application

for Arizona to administer a program under the Clean Water

Act because this was not a discretionary act of the agency. Id.

at 666-67. The salient provisions of the Clean Water Act mandated that the EPA approve the application once nine statutory criteria under 33 U.S.C. § 1342(b) were met. Id. If the

nine criteria were met, the EPA lacked discretion to deny the

application, regardless of § 7(a)(2) requirements. Id. Because

the EPA’s discretion was so limited in determining whether

to approve the applications, it did not trigger the requirements

under § 7(a)(2) of the ESA. Id. at 673. The Court stated that

“[a]s the mandatory language of [50 C.F.R.] § 402(b) itself

illustrates, not every action authorized, funded, or carried out

by a federal agency is a product of that agency’s exercise of

discretion.” Id. at 668. 

[4] In this case, the district court properly held that the

Bureau’s renewal of the Settlement Contracts is not subject to

§ 7(a)(2) of the ESA because its action is not a “discretionary

action.” Under § 8 of the Reclamation Act of 1902, the

Bureau must operate the CVP in conformity with California

water law on the “control, appropriation, use, or distribution

of water used in irrigation, or any vested right acquired thereunder.” 43 U.S.C. § 383; California v. United States, 438 U.S.

645, 675-79 (1978) (holding that California may impose conditions on permits granted to the United States for CVP operation). Section 8 includes the “full recognition” of any “vested

right acquired” under California water law. 43 U.S.C. § 383;

United States v. Gerlach Live Stock Co., 339 U.S. 725, 734

(1950). Under California law, senior appropriative water

rights must be satisfied before junior water rights. Pasadena

v. Alhambra, 33 Cal. 2d 908, 926 (1949). The Central Valley

Project Improvement Act (“CVPIA”), Pub.L. 102-575, 106

Stat. 4714 (1992), requires the Bureau to operate the CVP in

compliance with “all decisions of the California Water

8180 NRDC v. SALAZAR
Resources Control Board.” CVPIA § 3406(a). The California

Water Resources Control Board issued Decision 990 in which

it agreed to grant the Bureau rights to operate the CVP only

if it addressed the issue of those claiming to hold senior water

rights. Under the Settlement Contracts, negotiated at the

behest of the California Water Resources Control Board, the

Bureau is required to deliver base supply water for free and

that the supply may only be reduced by 25% in critically dry

years. The duty to deliver the base supply water is mandatory.

Under the contracts, the contractors are entitled to 100% of

their base water, which can only be reduced by 25% in very

dry years. Under the CVPIA, the Bureau is required to renew

these contracts upon request. See CVPIA § 3404(c). 

[5] Here, the Bureau’s discretion is limited with regard to

the Settlement Contracts so that § 7(a)(2) of the ESA is not

triggered. The Bureau’s hands are tied historically by those

asserting senior water rights in the CVP. The Bureau was

required to acknowledge such rights in order to operate the

CVP, which it did by entering the Settlement Contracts. We

agree with the district court, which held

Plaintiffs’ claims fail as to the [Settlement Contracts]

because [the Bureau’s] discretion is substantially

constrained by prior contract. Therefore, following

the Supreme Court’s decision in Home Builders,

[551 U.S. 644], Section 7(a)(2) of the ESA does not

apply to the [Settlement] Contract renewal process.

Specifically, Article 9(a) of the [Settlement] Contracts requires [the Bureau] to renew these contracts

for the same quantity of water, the same allocation

of water between base supply and project water, and

the same place of use on specifically designated land

as the original contracts. By executing the original

[Settlement] Contracts, [the Bureau] surrendered its

power to change these terms. Article 9(a) of the [Settlement] Contracts provides for the exact definition

of water rights achieved in the original [Settlement]

NRDC v. SALAZAR 8181
Contracts to be preserved upon renewal. This substantially constrains [the Bureau’s] discretion to

reduce diversions of Sacramento River System water

for the benefit of the Delta smelt or any other reason,

by fixing [Settlement] Contractor quantities, allocations, and places of use upon renewal. 

Natural Res. Def. Council v. Kempthorne, No. 1:05-cv-1207,

2009 WL 1575208, at *2 (E.D. Cal. June 3, 2009).

III. CONCLUSION

[6] We hold that the district court properly granted summary judgment for defendants, finding that plaintiffs lack

standing with regard to the DMC contracts and that § 7(a)(2)

of the ESA does not apply to the Settlement Contracts.

AFFIRMED.

PAEZ, Circuit Judge, dissenting:

I respectfully dissent. I agree with the majority that this

case is not moot. I disagree with the majority’s holdings that

the plaintiffs lack standing to challenge the Bureau’s renewal

of the Delta-Mendota Canal (“DMC”) contracts and that

§ 7(a)(2) of the Endangered Species Act (“ESA”), 16 U.S.C.

§ 1536(a)(2), does not apply to the United States Bureau of

Reclamation’s (“Bureau”) renewals of the Sacramento River

Settlement (“SRS”) contracts. Accordingly, I would reverse

the district court’s grant of summary judgment to the defendants and remand for further proceedings.

I

I can not agree with the majority’s holding that the plaintiffs lack standing to challenge the Bureau’s renewals of the

8182 NRDC v. SALAZAR
DMC contracts. Because the plaintiffs allege a straightforward procedural injury, they “must show only that they have

a procedural right that, if exercised, could protect their concrete interests.” Defenders of Wildlife v. EPA, 420 F.3d 946,

957 (9th Cir. 2005) (emphasis in original), overruled on other

grounds by Nat’l Assoc. of Home Builders v. Defenders of

Wildlife, 551 U.S. 644 (2007). In my view, the plaintiffs have

easily made such a showing.

The plaintiffs argue that the Bureau violated the ESA when

it renewed the 41 contracts at issue in this case—including the

DMC contracts—without consulting with the United States

Fish and Wildlife Service (the “Service”) on whether its

actions were “likely to jeopardize the continued existence of”

the delta smelt, a threatened species. See ESA § 7(a)(2), 16

U.S.C. § 1536(a)(2).1 I agree with the majority’s conclusion

that the plaintiffs alleged a procedural injury. Our precedent

makes clear, then, that the plaintiffs have standing if they can

demonstrate that ESA compliance by the Bureau could

advance their concrete interest in protecting the delta smelt

and its habitat. See Salmon Spawning & Recovery Alliance v.

Gutierrez, 545 F.3d 1220, 1226 (9th Cir. 2008); Defenders of

Wildlife, 420 F.3d at 957.

The plaintiffs have presented extensive evidence from

which a reasonable factfinder could conclude that the

Bureau’s ESA compliance would likely improve the conditions of the delta smelt and its habitat.2

 For example, the

1ESA § 7(a)(2) provides that, “[e]ach Federal agency shall, in consultation with and with the assistance of the Secretary [of the Interior], insure

that any action authorized, funded, or carried out by such agency . . . is

not likely to jeopardize the continued existence of any endangered species

or threatened species or result in the destruction or adverse modification

of habitat of such species which is determined by the Secretary . . . to be

critical.” 16 U.S.C. § 1536(a)(2). 

2Because we are reviewing a grant of summary judgment to the defendants, we must resolve all factual disputes in favor of the plaintiffs in

determining whether they have standing. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992). 

NRDC v. SALAZAR 8183
plaintiffs allege that if the Bureau were to consult with the

Service on the DMC contracts, it might choose to provide less

water to the contractors, which would improve the conditions

of the delta smelt and its habitat. The plaintiffs also allege that

consultation by the Bureau might result in a pricing structure

that is more protective of the delta smelt and its habitat.

Finally, the plaintiffs allege that if the Bureau were to consult

on the contracts, it might choose to alter the timing of water

deliveries, which could inure to the benefit of the delta smelt

and its habitat. The plaintiffs’ allegations and the record evidence to support them would allow a reasonable factfinder to

conclude that the Bureau’s ESA compliance could further the

plaintiffs’ concrete interest in protecting the delta smelt and

its habitat. On this record, I would hold that the plaintiffs have

standing to challenge the DMC contracts.

The majority places unwarranted emphasis on the shortage

provision of the DMC contracts. As the majority explains, this

provision allows the Bureau to forsake water deliveries to the

DMC contractors as necessary to comply with the ESA.3 The

majority concludes that because the terms of the DMC contracts authorize the Bureau to comply with the ESA, the plaintiffs do not have standing to assert a claim that the Bureau is

violating the consultation requirement of ESA § 7(a)(2). This

reasoning makes no sense. That the contracts allow the

Bureau to comply with the ESA certainly does not ensure that

the Bureau will do so. The plaintiffs contend that the Bureau

violated the ESA; the fact that the DMC contracts contain a

shortage provision tells us nothing about whether the plaintiffs are right.4

 Therefore, I dissent from the majority’s hold3Specifically, as the district court noted, each DMC contract contains a

provision that expressly allows the Bureau to take actions to protect Delta

smelt, including not delivering any water to DMC contractors if required

to comply with section 7(a)(2) . . . .” NRDC v. Kempthorne (NRDC I),

2008 WL 5054115 at *15 (E.D. Cal. 2008).

4

In addition to a shortage provision, the DMC contracts also contain a

liability-release provision that “relieves the Bureau of liability for any

8184 NRDC v. SALAZAR
ing that the plaintiffs lack standing to challenge the Bureau’s

renewals of the DMC contracts at issue in this case.

II

I also disagree with the majority’s holding that the requirements of ESA § 7(a)(2) do not apply to the Bureau’s renewals

of the SRS contracts. Pursuant to 50 C.F.R. § 402.03, the

requirements of ESA § 7(a)(2) “apply to all actions in which

there is discretionary Federal involvement or control.” The

Supreme Court upheld this regulation in Nat’l Assoc. of Home

Builders v. Defenders of Wildlife, stating, “§ 7(a)(2)’s nojeopardy duty covers only discretionary agency actions and

does not attach to actions . . . that an agency is required by

statute to undertake once certain specified triggering events

have occurred.” 551 U.S. 644, 669 (2007) (emphasis in original). I disagree with the majority’s conclusion that the

Bureau’s renewals of the SRS contracts were not discretionary agency actions.

A federal agency action is not discretionary when “consultation would be a meaningless exercise” and when “the

agency simply does not possess the ability to implement measures that inure to the benefit of the protected species.” Sierra

Club v. Babbitt, 65 F.3d 1502, 1509 (9th Cir. 1995). For

example, when an agency “cannot simultaneously obey the

differing mandates set forth in [ESA] § 7(a)(2)” and another

direct or indirect damage arising from reduced deliveries to DMC Contractors as a result of, among other things, actions taken by the Contracting

Officer to meet legal obligations.” NRDC I, 2008 WL 5054115 at *15

(internal quotation marks omitted). I see one feature of the liability-release

and shortage provisions that could inform our standing analysis, and it

favors the plaintiffs’ redressibility argument. Because the liability-release

and shortage provisions give the Bureau the ability to comply with the

ESA without breaching the DMC contracts, these provisions guarantee

that the DMC contracts are not a barrier to the Bureau’s ability to redress

the plaintiffs’ alleged injuries. 

NRDC v. SALAZAR 8185
statutory provision, the agency need not follow § 7(a)(2). See

Home Builders, 551 U.S. at 666 (holding that EPA action was

not discretionary where mandated by the Clean Air Act); see

also Babbitt, 65 F.3d at 1509. On the other hand, “if the project’s implementation depend[s] on additional agency action,”

then the agency “c[an] not avoid the procedural requirements

of section 7(a)(2).” Babbit, 65 F.3d at 1509; see also Karuk

Tribe of California v. U.S. Forest Serv., ___ F.3d ___, 2012

WL 1959231, *17 (9th Cir. 2012) (en banc) (“Under our

established case law, there is ‘agency action’ sufficient to trigger the ESA consultation duty whenever an agency makes an

affirmative, discretionary decision about whether, or under

what conditions, to allow private activity to proceed.”). 

The plaintiffs contend that the Bureau’s renewals of the

SRS contracts were discretionary actions for two reasons: (a)

because the Bureau could have chosen simply to not renew

the SRS contracts; and (b) because the Bureau could have

negotiated terms in the renewed SRS contracts that were protective of the delta smelt and its habitat. I agree with the

plaintiffs.

A. Discretion Not to Renew the SRS Contracts

1. Central Valley Project Improvement Act

The majority holds that the Central Valley Project Improvement Act (“CVPIA”) § 3404(c) compels the Bureau to renew

the SRS contracts. Op. at 8180-81. I disagree. CVPIA

§ 3404(c) provides, “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 twenty-five years and may renew such contracts

for successive periods of up to 25 years each.” CVPIA

§ 3404(c), 106 Stat. 4600, 4707 (1992). By its terms, CVPIA

§ 3404(c) applies only to “long-term repayment [and] water

service” contracts. There are several reasons to conclude that

8186 NRDC v. SALAZAR
the SRS contracts are not “water service” contracts within the

meaning of § 3404(c).5

First, the CVPIA expressly distinguishes SRS contracts

from “water service” contracts in another section, § 3405(a).6

Section 3405(a) thus demonstrates that Congress considered

“water service” contracts and settlement contracts to be two

distinct categories of contracts. Accord Powerex Corp. v.

Reliant Energy Servs., Inc., 551 U.S. 224, 232 (2007) (“A

standard principle of statutory construction provides that identical words and phrases within the same statute should normally be given the same meaning.”).

Second, § 3404(c) refers to contracts for “water from the

Central Valley Project.” The CVPIA defines “Central Valley

Project water” as “[a]ll water that is developed, diverted,

stored or delivered by the Secretary in accordance with the

statutes authorizing the Central Valley Project and in accordance with the terms and conditions of water rights acquired

pursuant to California Law.” § 3403(f) (emphasis added). The

SRS contractors persuasively argue that the water they use is

not “Central Valley Project water” because it is not diverted

by the federal government. Rather, the SRS contractors divert

water directly from the Sacramento River. Because the SRS

contracts do not involve “Central Valley Project water,”

§ 3404(c) seems inapplicable.

Third, until this litigation, the Bureau had taken the position that the SRS contracts are not “water service” contracts

within the meaning of § 3404(c).7 Of course, that the Bureau

5

It is undisputed that the SRS contracts are not “long-term repayment”

contracts, as referenced in § 3404(c). 

6Section 3405(a) gives “all individuals or districts who receive Central

Valley Project water under water service or repayment contracts, water

rights settlement contracts, or exchange contracts” the right to transfer

water. (emphasis added). 

7For example, in its 2004 EIS on the SRS contract renewals, the Bureau

explained that “[t]he CVPIA expressly distinguishes Settlement Contracts

NRDC v. SALAZAR 8187
has changed course is not fatal to its argument, but it is powerful evidence that Congress did not intend § 3404(c) to apply

to the SRS contracts.8 Moreover, in 2004 Congress passed a

rider to is appropriations bill that provided two additional

years for the SRS contracts to be renewed, apparently contemplating the possibility that the SRS contracts would otherwise

expire. Energy Water Development Appropriation Act, Pub.

L. No. 108-137, 117 Stat. 1827 (2003). For these reasons, I

would hold that CVPIA § 3404(c) does not require renewal of

the SRS contracts.

2. State Water Resources Control Board Decision 990

I disagree with the majority’s holding that a decision of

California’s State Water Resources Control Board (SWRCB)

requires the Bureau to renew the SRS contracts. Op. at 8181.

In 1961, the SWRCB issued Decision 990 (“D-990”), which

granted the Bureau state water permits to operate the CVP.

Federal law requires the Bureau to comply with this decision.

43 U.S.C. § 383; see also California v. United States, 438

U.S. 645, 653 (1978). 

The SRS contractors argue that Condition 23 of D-990

compels the Bureau to renew the SRS contracts. Condition 23

provides:

The export of stored water under [the applicable perfrom ‘CVP water service contracts’ or ‘repayment contracts.’ ” The

Bureau even noted that “it is common for commentors to mistake CVPIA

provisions relating to other types of contracts (i.e. water service contracts

or repayment contracts, sometimes referred to as 9(e) contracts) as relating

to all types of CVP water contracts. This is not the case. . . . [T]he provision in Section 3404(c) limiting the term of repayment and water service

contracts to a period not to exceed 25 years does not apply to the Settlement Contracts.” ER 1844-45. 

8The Bureau now characterizes the SRS contracts as “hybrid” contracts

that are “both water service and settlement contracts.” The CVPIA, however, does not refer to “hybrid” contracts.

8188 NRDC v. SALAZAR
mits] outside the watershed of Sacramento River

Basin or beyond the Sacramento-San Joaquin Delta

shall be subject to the reasonable beneficial use of

said stored water within said watershed and Delta,

both present and prospective, provided, however,

that agreements for the use of said stored water are

entered into with the United States prior to March 1,

1964, by parties currently diverting water from Sacramento River and/or Sacramento-San Joaquin

Delta. . . .

Like the district court, I read Condition 23 to have simply

imposed a deadline—March 1, 1964—by which the parties

were required to enter into the SRS contracts. It seems

implausible that Condition 23 meant that the SRS contracts,

entered for 40-year terms, were permanent. Therefore, I

would reject the SRS contractors’ argument that D-990 compels renewal of the SRS contracts.

Having concluded that the Bureau has discretion simply not

to renew the SRS contracts, I would hold that the Bureau must

comply with ESA § 7(a)(2). See, e.g., NRDC v. Houston, 146

F.3d 1118, 1126 (9th Cir. 1998); Turtle Island v. Nat’l Marine

Fisheries Serv., 340. F3d 969, 977 (9th Cir. 2003). 

B. Discretion to Negotiate the Terms of the SRS Renewal

Contracts

1. Contract Language

The majority holds that a provision contained in the original SRS contracts constrains the Bureau’s discretion to negotiate terms upon renewal that might inure to the benefit of the

delta smelt.9 I disagree. Because I would conclude that the

9As the district court noted, “[u]nder certain circumstances, a prior

agreement, permit, or management decision that predates the listing of a

species may constrain a federal agency’s ability to take action on behalf

of that listed species, absolving the agency from the requirement of consultation.” NRDC II, 621 F.Supp.2d at 976 (E.D. Cal. 2009) (citing Babbitt, 65 F.3d at 1509). 

NRDC v. SALAZAR 8189
original SRS contracts do not prevent the Bureau from renewing the SRS contracts on terms that might benefit the delta

smelt and its habitat, I would hold that the Bureau must comply with the consultation requirements of ESA § 7(a)(2). See

Houston, 146 F.3d at 1126 (holding that “there was discretion

available to the Bureau during the negotiation process” where,

like here, the government was entitled to renew water contracts on “mutually agreeable” terms). 

The district court correctly noted that we must “look to

general principles concerning the interpretation of contracts”

in interpreting a contract to which the United States is a party.

NRDC v. Kempthorne (NRDC II), 621 F.Supp.2d 954, 980

(E.D. Cal. 2009). One of the bedrock principles of contract

interpretation is that “[a] written contract must be read as a

whole and every part interpreted with reference to the whole,

with preference given to reasonable interpretations.” Klamath

Water Users Protective Ass’n v. Patterson, 204 F.3d 1206,

1210 (9th Cir. 1999) (quoted in NRDC II, 621 F.Supp.2d at

980). Moreover, we must interpret the SRS renewal contracts

“so as to avoid internal conflict.” Trident Ctr. v. Conn. Gen.

Life Ins. Co., 847 F.2d 564, 566 (9th Cir. 1988) (quoted in

NRDC II, 621 F.Supp.2d at 980). 

I disagree with the majority’s holding that Article 9(a) of

the original SRS contracts prevents the Bureau from negotiating the terms of the renewed SRS contracts. Article 9(a) of

each original SRS contract provides:

(a) During the term of this contract and any renewal

thereof:

(1) It shall constitute the full agreement as

between the United States and the Contractor as to the quantities of water and the allocation thereof between the base supply and

Project Water which may be diverted by the

Contractor from the Sacramento River for

8190 NRDC v. SALAZAR
beneficial use . . . which said diversion, use,

and allocation shall not be disturbed so long

as the Contractor shall fulfill all its obligations hereunder; and

(2) The Contractor shall not claim any right

against the United States in conflict with

the provisions thereof.

Like the district court, the majority interprets Article 9(a) to

mean that the terms of the original SRS contracts constitute

full agreement on all material terms, for all future renewals of

the contracts. Op. at 8181-82. Read in isolation, Article 9(a)’s

use of the phrase “full agreement” does seem to preclude the

possibility of renegotiating the terms of the SRS contracts

upon renewal. Read in context, however, the majority’s interpretation is unworkable because Article 2 of each SRS contract provides:

This contract shall remain in effect until and including March 31, 2004: Provided, That under terms and

conditions mutually agreeable to the parties hereto,

renewals may be made for successive period not to

exceed forty (40) years each. The terms and conditions of each renewal shall be agreed upon not later

than one (1) year prior to the expiration of the then

existing contract. . . 

(emphasis added). The language of Article 2 strongly suggests

that the parties anticipated renegotiating the terms of the SRS

contracts upon renewal.

In light of Article 2 and the history of the SRS contracts,

I interpret Article 9(a) to be a partial integration clause, which

merely guarantees that each SRS contract (and renewal

thereof) constitutes a “full agreement” between the parties

with respect to water quantity and allocation. In other words,

it appears that Article 9(a) was included in each SRS contract

NRDC v. SALAZAR 8191
to avoid litigating the extent of the SRS contractors’ underlying water rights.10 The majority’s interpretation—that Article

9(a) freezes in perpetuity the precise water quantity and allocation terms of each SRS contract—is illogical in light of

Article 2, which expressly states that the terms and conditions

of the renewal contracts must be “mutually agreeable.” Thus,

I would hold that Articles 2 and 9(a) must be harmonized, and

that the only sensible reading of Article 9(a) is that it is a partial integration clause.

Moreover, even if Article 9(a) did constrain the Bureau’s

discretion to renegotiate the water quantity and allocation

terms of the SRS contracts upon renewal—which I do not

think it does—the plaintiffs persuasively point out that Article

9(a), by its terms, does not constrain the Bureau’s discretion

to renegotiate non-quantity contract terms, such as the terms

governing the pricing and timing of water deliveries. Because

the Bureau has discretion to negotiate terms of the SRS

renewal contracts that could inure to the benefit of the delta

smelt, I would hold that it must comply with ESA § 7(a)(2).

I therefore dissent from the majority’s holding that the Bureau

was not required to comply with the consultation requirements of § 7(a)(2) in renewing the SRS contracts.

III

For the foregoing reasons, I would reverse the district

court’s grant of summary judgment to the defendants and

remand this case to the district court for consideration in the

first instance of the merits of the plaintiffs’ claims involving

the DMC contracts and for further consideration of the plaintiffs’ claims involving the SRS contracts.

10The Bureau and the Sacramento River water users entered the SRS

contracts in 1964 after the SWRCB instructed the parties to reach a settlement agreement rather than engage in a “lengthy and extremely costly

adjudication of the waters of the Sacramento River and its tributaries.” 

8192 NRDC v. SALAZAR