Opinion ID: 3066157
Heading Depth: 4
Heading Rank: 2

Heading: The delta smelt

Text: The delta smelt (Hypomesus transpacificus) is a small, two-to-three inch species of fish endemic to the San Francisco Bay/Sacramento-San Joaquin Delta Estuary. BiOp at 140–41. Once an abundant species in the Bay-Delta ecosystem, the delta smelt is now in imminent danger of extinction. In March 1993, the species was listed as threatened under the ESA, and the FWS designated the BayDelta system a critical habitat for the delta smelt in 1994.3 50 C.F.R. § 17.11; BiOp at 140. Yet, over the past decade, the delta smelt population has been decimated even relative to these depleted levels, with a measured decline since 2000 3 In 1990, the National Marine Fisheries Service listed the Sacramento River winter-run chinook salmon as a threatened species under the Endangered Species Act. 50 C.F.R. § 227.4; Orff v. United States, 545 U.S. 596, 599 (2005); O’Neill v. United States, 50 F.3d 677, 681 (9th Cir. 1995). This case does not involve the salmon. 32 SAN LUIS V. JEWELL of up to three orders of magnitude below historic lows.4 San Luis & Delta-Mendota, 760 F. Supp. 2d at 866. As a consequence, the FWS announced in 2010 that reclassifying the delta smelt from a threatened to an endangered species was warranted but precluded by higher priority listings.5 Id. The ESA provides “both substantive and procedural provisions designed to protect endangered species and their habitat.” Am. Rivers v. Nat’l Marine Fisheries Serv., 126 F.3d 1118, 1121 (9th Cir. 1997).6 One such protection, § 7(a)(2) of the ESA, requires federal agencies 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). Should the agency find that its proposed action may affect a listed species or critical habitat, it must formally or informally consult with the Secretary of the Interior, or his or her delegee. 16 U.S.C. § 1536(a)(4); 50 C.F.R. § 402.14(a); see Am. Rivers, 126 F.3d at 1122. If no effect is found, consultation is not required. 4 The 2008 delta smelt population was estimated at 1.5% of the 1980 level, 75 Fed. Reg. 17667 (April 7, 2010), and 2009 levels were estimated to be the lowest on record. San Luis & Delta-Mendota, 760 F. Supp. 2d at 866. 5 The delta smelt was assigned a listing priority of 2 on a scale from 1 to 12, with 1 being the highest priority. San Luis & Delta-Mendota, 760 F. Supp. 2d at 866–67 n.6. 6 Among other things, the CVPIA instructs the Secretary of the Interior to “operate the Central Valley Project 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), 106 Stat. at 4714. SAN LUIS V. JEWELL 33 50 C.F.R. § 402.14. Formal consultation is required when the acting agency or consulting agency determines that the proposed action is likely to adversely affect a listed species or critical habitat. 50 C.F.R. §§ 402.13, 402.14. Formal consultation requires the consulting agency, here the FWS, to issue a biological opinion stating whether the proposed action is likely to jeopardize such species or habitat. 16 U.S.C. § 1536(b); 50 C.F.R. § 402.14. Should the action jeopardize the species or habitat, the consulting agency must suggest any “reasonable and prudent alternatives” (RPA) that would allow the projects to continue operation without causing jeopardy to the species or adverse modification to its critical habitat. 16 U.S.C. § 1536(b)(3)(A). Once it receives the BiOp, the acting agency “shall determine whether and in what manner to proceed with the action in light of its section 7 obligations and the [FWS’s] biological opinion.” 50 C.F.R. § 402.15(a). If, after consultation, the agency determines that it cannot comply with § 7(a)(2), it may apply for an exemption, which can only be authorized by the Endangered Species Committee, an ad hoc panel composed of executive branch members and at least one appointee from the state in which the project is to occur. 16 U.S.C. § 1536(e); 50 C.F.R. §§ 402.15(c), 451. B. Proceedings Leading To The Present Controversy 1. The FWS’s 2008 Biological Opinion Reclamation sought a biological opinion from the FWS as part of its continued long-term operation of the CVP and its coordinated operations with state agencies of the SWP. BiOp 34 SAN LUIS V. JEWELL at 1, 8.7 Following § 7(a)(2) review and a subsequent formal consultation, the FWS issued a biological opinion in 2005 (2005 BiOp). The 2005 BiOp found that the proposed coordinated operations of the CVP and SWP would not have an adverse effect on the continued existence and recovery of the delta smelt and its critical habitat. San Luis & DeltaMendota, 760 F. Supp. 2d at 863. The Natural Resources Defense Council—defendants-intervenors-appellants in the present case—challenged the FWS’s conclusion in U.S. District Court for the Eastern District of California, and the court found the 2005 BiOp arbitrary and capricious. Kempthorne, 506 F. Supp. 2d at 387. After conducting an extensive evidentiary hearing, the district court issued an interim remedial order and findings of fact and conclusions of law, which covered, among other things, the effects on delta smelt of negative flows in OMR. See San Luis & DeltaMendota, 760 F. Supp. 2d at 864. The district court ordered Reclamation and DWR to implement a winter “pulse flow” in OMR of no more negative than !2,000 cfs, and to “operate the CVP and SWP to achieve a daily average net upstream (reverse) flow in the OMR not to exceed !5,000 cfs on a seven-day running average during a defined period in the spring.”8 Id.; Int. Rem. Order at 5–7. The district court also 7 The precipitating event for Reclamation seeking a biological opinion was a 2004 Operating Criteria and Plan (OCAP), reflecting changes in facilities, water delivery requirements, and regulatory restrictions and increasing coordination between federal and state agencies. NRDC v. Kempthorne, 506 F. Supp. 2d 322, 330 (E.D. Cal. 2007). 8 When water is diverted from the Bay-Delta contrary to its natural course, the amount of water exported is usually expressed as a negative number because the pumping plants reverse OMR flow. For example, if the Banks facility is pumping 2,500 cubic feet per second to the California Aqueduct, it is noted as !2,500 cfs. SAN LUIS V. JEWELL 35 ordered the FWS to complete a new BiOp in just nine months, a deadline that it would ultimately extend to one year. San Luis & Delta-Mendota, 760 F. Supp. 2d at 865; Int. Rem. Order at 2. The FWS issued a new delta smelt biological opinion on the deadline, December 15, 2008 (2008 BiOp or BiOp).9 BiOp at 1–396. In stark contrast to the 2005 BiOp, the 2008 BiOp concluded that the “coordinated operations of the CVP and SWP, as proposed, are likely to jeopardize the continued existence of the delta smelt” and “adversely modify delta smelt critical habitat.” BiOp at 276–78. With respect to the delta smelt, the FWS entered five findings of fact: (1) “Diversions of water from the Delta have increased since 1967 when the SWP began operation in conjunction with the CVP.” BiOp at 276. The CVP/SWP operations have entrained smelt, including adults, larvae, and juveniles, at the Banks and Jones facilities; reduced smelt habitat; and reduced the Delta outflows, altering the location of the LSZ; (2) “The delta smelt is currently at its lowest level of abundance since monitoring began in 1967”; (3) “Under the proposed CVP/SWP operations, inflows to the Delta are likely to be further reduced, as water demands upstream of the Delta increase, most notably on the American River.” BiOp at 276. This is likely to “cause increased relative entrainment of adult delta smelt in the winter and spring, and of larval and juvenile 9 In preparing this BiOp, the FWS subjected it to an Internal Peer Review Team, consisting of experts in the development of complex biological opinions under the ESA from throughout the FWS, comments from a team of delta smelt experts from within the FWS and other related agencies, the review of PBS&J, an environmental consulting firm, as well as feedback from Reclamation and the DWR. See BiOp at i–vi. In response to the significant feedback it received, the FWS made substantial changes to the BiOp. See BiOp at ii. 36 SAN LUIS V. JEWELL delta smelt in the spring”; (4) “Other baseline stressors will continue to adversely affect the delta smelt, such as contaminants, microcystis, aquatic macrophytes, and invasive species”; (5) To recover, delta smelt will need a more abundant adult population, an increase in the quality and quantity of spawning, rearing, and migratory habitat, a reduction in contaminants and pollutants, a reduction in exposure to disease and toxic algal blooms, and a reduction in entrainment at water-diversion facilities in the Bay-Delta. BiOp at 276–77. With respect to delta smelt critical habitat, the FWS found that “past and present operations of the CVP/SWP have degraded these habitat elements” such that they are “insufficient to support successful delta smelt recruitment at levels that will provide for the species’ conservation.” BiOp at 278. The FWS recommended five components and listed six separate actions as “reasonable and prudent alternatives” (RPA): RPA Component 1 (Actions 1 and 2). Component 1 protects the adult delta smelt life stage by controlling OMR flows during the vulnerable December to March period. It has two proposed actions. Action 1 is “designed to protect upmigrating delta smelt” and describes the two periods when delta smelt are most vulnerable to entrainment: in December and when the first flush appears. BiOp at 280–81. Action 1 therefore proposes limiting the negative flows at OMR based on a “daily salvage index.” Id. In effect, this means that when the “daily salvage index” reaches a critical point (“the risk threshhold”), the Projects have to reduce their diversion for 14 days. During that period, OMR flows can be “no more negative than !2,000 cfs” for a 14-day running average and “no more negative than -2,500 cfs” for a 5-day running SAN LUIS V. JEWELL 37 average. BiOp at 281, 329. Action 2 follows from Action 1 but covers the period from December through March, when pre-spawning adult delta smelt are vulnerable to entrainment. BiOp at 352. During that period, OMR flows can be no more negative than !5,000 cfs, although the FWS expected that flows would generally be in the range of !2,000 cfs to !3,500 cfs. RPA Component 2 (Action 3). Component 2 protects larval and juvenile delta smelt by limiting OMR flows following the completion of Component 1 when the BayDelta water temperatures reach 12EC, or when a spent female smelt is detected in trawls at Jones or Banks or is found in the salvage facilities. Action 3 requires the CVP/SWP projects to maintain their average OMR flows between !1,250 and !5,000 cfs until June 30, or until the mean water temperature reaches a target level, whichever occurs earlier. BiOp at 290, 357–58. RPA Component 3 (Action 4). Component 3 improves smelt habitat by increasing Bay-Delta outflow during the fall. Action 4 requires that in September and October, in years when the precipitation and runoff is defined as “wet or above normal,” Reclamation and DWR must provide sufficient Delta outflow to maintain X2 no more eastward than 74 km from the Golden Gate in wet years and 81 km in above- normal years.10 BiOp at 282–83, 369. 10 In Action 4, the FWS noted that “there may be other ways to achieve the biological goals of this action,” and that it would evaluate alternatives and modify Action 4 “consistent with the intention of this action.” The FWS referred to this process as an “adaptive management process.” BiOp at 283. 38 SAN LUIS V. JEWELL RPA Component 4 (Action 611). Component 4 restores habitat by establishing a program to create or restore intertidal and associated subtidal habitat to the Bay-Delta and Suisun Marsh. Action 6 requires DWR to create or restore at least 8,000 acres in the Delta and Suisun Marsh. BiOp at 283. RPA Component 5. Component 5 monitors and reports on the implementation, success, and possible improvements of Components 1–4.12 Finally, the FWS issued an “incidental take statement” (ITS) in accord with 50 C.F.R. § 402.02. For purposes of the ITS, the FWS presumed that its reasonable and prudent alternatives would be implemented. Based on that premise, the FWS found that, as a result of CVP/SWP operations, there would be a take of the delta smelt, and that although the extent of the take would be difficult to estimate, smelt entrainment would be minimized when OMR flows were regulated according to the FWS’s proposed RPA. BiOp at 285–86. As a consequence, the FWS concluded that “this level of anticipated take is not likely to result in jeopardy to the species or destruction or adverse modification of critical habitat when the RPA is implemented.” BiOp at 293. 11 For Action 5 see, infra, Note 12. 12 Component 5 did not have a separate action item, and Action 5 was not formally associated with any of the RPA Components. Action 5 was specific to the installation of a physical barrier on the Old River that affected entrainment of larval and juvenile delta smelt. BiOp at 377–78. SAN LUIS V. JEWELL 39 2. The present case The first of six complaints challenging the FWS’s 2008 BiOp was filed in March 2009. San Luis & Delta-Mendota, 760 F. Supp. 2d at 865. “Plaintiffs moved for a preliminary injunction . . . to prevent Reclamation from implementing Component 2 of the RPA, alleging that FWS violated the National Environmental Policy Act (“NEPA”) and the ESA.” Id. The district court granted the motion in part, finding that plaintiffs-appellees were likely to succeed on the merits of their NEPA claim, and requiring the FWS to make specific written findings to justify weekly decisions regarding OMR flow restrictions. Id. Plaintiffs-appellees sought a preliminary injunction against the implementation of RPA Component 3. Id. Following an evidentiary hearing,13 the district court issued a preliminary injunction confirming that plaintiffs-appellees had succeeded on their NEPA claims and finding that 13 At the evidentiary hearing, the district court appointed four experts pursuant to Federal Rule of Evidence 706, which permits the court to “appoint any expert that the parties agree on and any of its own choosing.” Fed. R. Evid. 706(a). The court appointed two professors from the University of Washington, Dr. Andre Punt and Dr. Thomas Quinn, to advise the court on the complex technical and scientific matters. The court also appointed two additional experts: a Reclamation employee knowledgeable on the CVP, and a DWR employee knowledgeable in the SWP. In addition to these court-appointed experts, the district court permitted substantial declarations from experts selected (but not agreed to) by the parties. In its written decision, the district court relied extensively on opinions and evidence submitted by its own experts and by the parties’ experts. 40 SAN LUIS V. JEWELL plaintiffs-appellees were likely to succeed on the merits of their ESA claim. Id. In December 2010, the district court entered final judgment on the primary claims in a 115-page opinion. Id. at 967–70. Although the FWS’s 2008 BiOp reached antipodal conclusions to the 2005 BiOp—which reached a no-jeopardy conclusion and was found arbitrary and capricious—the district court once again found the 2008 BiOp to be arbitrary and capricious under the ESA and the APA and remanded the BiOp, its RPA, and Reclamation’s provisional acceptance of the RPA to the agency. San Luis & Delta-Mendota, 760 F. Supp. 2d at 855, 970. The court’s remand required the completion of yet a third BiOp analyzing the impact of CVP and SWP operations on the delta smelt. San Luis & DeltaMendota, 760 F. Supp. 2d at 870. In March 2011, the district court entered final judgment on all remaining claims. Although the district court accepted the BiOp’s central conclusion that “Project operations are likely to jeopardize the continued existence and/or adversely modify the critical habitat of the delta smelt,” id. at 969, the district court determined that there were a number of specific flaws with the BiOp, id. at 967–70. We will briefly set forth the district court’s principal objections here—which are highly technical and somewhat obtuse out of context—and explain them in more detail in the discussion section. First, the district court found the BiOp’s reliance on analyses using raw salvage figures—e.g., those calculations that incorporated the absolute “raw” number of smelt entrained in pumping stations, as opposed to the smelt entrained as a percentage of the total population—to be arbitrary and capricious and not the result of the best SAN LUIS V. JEWELL 41 available science. Id. at 968. These calculations significantly influenced the upper and lower OMR flow limits in Actions 1, 2, and 3. Second, the district court found that the BiOp’s use of two different models, CALSIM II and DAYFLOW, that predict the location of X2, introduced bias requiring a corrective calibration or, at the very least, explanation. Id. The district court also found that the bias produced by the comparison of CALSIM II to DAYFLOW tainted the BiOp’s justification for Action 4, which involves the management of X2. In addition, the district court found that the BiOp did not sufficiently explain why it is essential in Component 3 (Action 4) to maintain X2 at the specific locations of 74 km upstream from the Golden Gate Bridge following “wet years” and 81 km following “above-normal years.” Id. at 969. Third, the district court found that the BiOp did not sufficiently explain why different data sets were used to calculate the incidental take limit for juvenile and for adult smelt, and why these limits were calculated using an average of previous years’ smelt salvage (which would be expected to be exceeded in 50% of all future years). Fourth, the district court found the BiOp did not adequately support its conclusions that Project operations are reasonably certain to indirectly affect the delta smelt by limiting delta smelt food supply, by increasing harmful pollution and contaminants, and by increasing the detrimental impact of the “other stressors” of predation, macrophytes, and microcystis on delta smelt. Id. Fifth, the district court held that the BiOp failed to analyze economic feasibility, consistency with the purpose of 42 SAN LUIS V. JEWELL the action, and consistency with the action agency’s authority, as required by § 402.02. See 5 U.S.C. § 551 et seq; 50 C.F.R. § 402.02. Id. at 969–70. Federal Defendants and the NRDC have timely appealed, urging reversal of the district court’s remand. We address their claims in Part IV. The San Luis & Delta-Mendota Water Authority and other appellees timely cross-appealed, arguing that the district court did not go far enough. They raise three claims: First, that the FWS violated the ESA by not separating out nondiscretionary actions from discretionary actions in setting an environmental baseline; second, that Reclamation acted arbitrarily and capriciously in adopting the flawed BiOp; and, third, that the FWS failed to conduct the review required by NEPA.14 We address their claims in Part V. This tortured procedural history has extended over seven years, and has led to five fully consolidated suits and one partially consolidated suit brought by various groups who use water supplied by the CVP and SWP, as well as to the completion of two extensively researched BiOps—with a third currently in progress. All the while, the delta smelt has teetered on the brink of extinction. We agree with Federal Defendants and the NRDC and reverse the district court's remand of the BiOp. We affirm the 14 Federal Defendants and the NRDC also appeal the district court’s determination that Reclamation failed to conduct review required by NEPA. We address this direct appeal together with appellees’ cross appeal. SAN LUIS V. JEWELL 43 district court’s judgment that Reclamation failed to comply with NEPA before implementing the FWS’s BiOp.