Opinion ID: 755346
Heading Depth: 3
Heading Rank: 2

Heading: Applicability of the ESA

Text: 20 As a threshold question, the Non-federal Defendants argue that the ESA did not apply to the contract renewals because the renewals were not agency action. See 16 U.S.C. § 1536(a)(2). This argument must fail. The term agency action has been defined broadly. In TVA v. Hill, 437 U.S. 153, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978), the Court stated: 21 One would be hard pressed to find a statutory provision whose terms were any plainer than those in § 7 of the Endangered Species Act. Its very words affirmatively command all federal agencies to insure that actions authorized, funded, or carried out by them do not jeopardize the continued existence of an endangered species or result in the destruction or modification of habitat of such species.... This language admits of no exception. 22 Id. at 173, 98 S.Ct. 2279. See also Pacific Rivers, 30 F.3d at 1055 (Following the Supreme Court's lead in TVA, we have construed 'agency action' broadly.) The regulation defining agency action states: 23 Action means all activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies.... Examples include, but are not limited to: ... the granting of licenses, contracts, leases, easements, rights-of-way, permits or grants in aid. 24 50 C.F.R. § 402.02. Clearly, negotiating and executing contracts is agency action. 25 Orange Cove, the Madera Irrigation District (Madera) and Chowchilla Water District (Chowchilla) contend that the Bureau had no discretion to alter the terms of the renewal contracts, particularly the quantity of water delivered. 3 Where there is no agency discretion to act, the ESA does not apply. Sierra Club v. Babbitt, 65 F.3d 1502, 1509 (9th Cir.1995). The federal reclamation laws, which provided the right to renewal, state that the government is to renew the contracts on mutually agreeable terms, 43 U.S.C. § 485h-1(1), that water rights are based on the amount of available project water, 43 U.S.C. § 485h-1(4), and that the Secretary of the Interior (Secretary) has the discretion to set rates to cover an appropriate share of the operation and maintenance costs, 43 U.S.C. § 485h(e). Clearly, there was some discretion available to the Bureau during the negotiation process. 26 Orange Cove points to the opinion of the Solicitor of the Interior that the Bureau had no discretion for purposes of a NEPA analysis. Orange Cove argues that this opinion was entitled to deference. The opinion, however, only addresses the applicability of NEPA, not the ESA. Even if this opinion were relevant, the district court correctly concluded that the Solicitor's opinion was inconsistent with the requirements of the ESA. First, the opinion began from the premise that the government did not intend to make any substantial changes in the renewal contracts. The Solicitor, however, did not conclude that there was no discretion to change the terms of the contracts. He wrote: 27 If the Secretary exercises his discretion to make other substantial changes in the contracts at the time of renewal, then analysis must be undertaken to determine whether the exercise of discretion qualifies for a categorical exclusion from preparation analysis under NEPA.... [While there is no discretion to alter the quantity of water received ... the] Secretary has considerable discretion, however, to change other terms of the renewed contracts. 28 The Solicitor concluded that there was no discretion to change the quantity of water delivered under the contracts because the districts have a first right ... to a stated share or quantity of the project's available water supply.... (Citing 43 U.S.C. § 485h-1(4)). The Solicitor, however, assumed that the project's available water supply included all of the Friant dam water, and he did not address the issue of whether the total amount of available project water could be reduced in order to comply with the ESA or state law. See O'Neill v. United States, 50 F.3d 677, 686 (9th Cir.1995) (noting that an agency can deliver less than a contractually agreed upon amount of water in order to comply with subsequently enacted federal law). Therefore, even if the original contracts guaranteed the Non-federal Defendants a right to a similar share of available water in the renewal contracts, the Bureau had discretion to alter other key terms in the contract, and the Bureau may be able to reduce the amount of water available for sale if necessary to comply with ESA.