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Ninth Circuit Upholds Agencies’ Decisions on Clean Water Act and Endangered Species Act Challenges in Butte Environmental Council v. United States Army Corps of Engineers July 6, 2010 by Brian D. Poulsen bpoulsen@somachlaw.com |
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On June 1, 2010, the Ninth Circuit Court of Appeals upheld the decisions of two federal agencies approving the construction of a business park on protected wetlands in Redding, California, in Butte Environmental Council v. United States Army Corps of Engineers, No. 09-15363, 2010 U.S.App. LEXIS 11024 (9th Cir. June 1, 2010). The Court rejected Butte Environmental Council’s (BEC) challenge that the Army Corps of Engineers (Corps) and the U.S. Fish & Wildlife Service (FWS) violated the Clean Water Act (CWA) and Endangered Species Act (ESA), respectively, in approving a project that will impact several acres of wetlands and many more acres of critical habitat for listed species. Background The City of Redding (City) decided to construct a business park on a 678-acre site located on wetlands along Stillwater Creek (Project). Based on a comparison of over a dozen potential sites, the City concluded that the Stillwater Creek site was the least environmentally damaging practicable alternative (LEDPA) that still fulfilled the basic purpose of the City’s project and its feasibility criteria. Despite the existence of other potential sites that would result in fewer adverse impacts to wetlands, the Corps accepted the City’s findings, dismissing these other sites as infeasible because they failed to meet the City’s criteria for size and were not contiguous with other City-owned property. The Project site also contains critical habitat for several ESA-listed species, including the threatened vernal pool fairy shrimp, endangered vernal pool tadpole shrimp, and threatened slender Orcutt grass. The Final Environmental Impact Statement (EIS) indicates that the Project will destroy 234.5 acres of critical habitat for the vernal pool species, and 242.2 acres of critical habitat for the threatened slender Orcutt grass. The EIS also indicates that the Project will impact approximately seven acres of aquatic habitat for the vernal pool species. The Project proposes to offset the aquatic impacts by preservation, restoration, and creation of vernal pool habitat in other on- and off-site locations. The FWS acknowledged that “'the proposed project would contribute to a local and range-wide trend of habitat loss and degradation,' and 'to the fragmentation and reduction of the acreage of the remaining listed vernal pool species habitat.'” Nonetheless, the FWS concluded that the Project, as proposed, “is not likely to jeopardize the continued existence of the ... vernal pool fairy shrimp, vernal pool tadpole shrimp, and slender Orcutt grass.” The FWS further concluded that “the proposed [P]roject would not result in the adverse modification or destruction of critical habitat” for those species. In June 2008, BEC, a nonprofit environmental organization, filed suit against the Corps and the FWS in federal district court. The district court granted summary judgment in favor of the agencies. Decision The Court first analyzed BEC’s CWA challenge. BEC argued that the Corp’s approval was arbitrary and capricious, asserting five reasons why the Project is not the LEDPA: (1) the Corps failed to apply the proper presumption under 40 C.F.R. § 230.10(a)(3), which provides that where a proposed activity is not water dependent, “practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated otherwise”; (2) the Corps’ approval is inconsistent with its prior comments on the Project; (3) the Corps never made an independent determination of the Project’s purpose or the size of parcel needed for the Project; (4) the Corps improperly rejected an alternative Project site as impractical; and (5) the Corps improperly relied upon the City’s proposed off-site mitigation as part of its analysis. The Court analyzed each of these arguments in turn. First, the Court rejected BEC’s argument that the Corps improperly applied the presumption required by 40 C.F.R. § 230.10(a)(3). That regulation requires that where a proposed activity “does not require access or proximity to or siting within the special aquatic site in question to fulfill its basic purpose (i.e., is not water dependent), practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated otherwise.” The Corps acknowledged in its approval that the project was not water dependent, but concluded that, based on a review of over a dozen alternative sites, the City had “clearly demonstrated” that there are no practicable alternative sites available. Thus, the City properly rebutted the presumption that less environmentally damaging alternatives were available. Second, the Court held that notwithstanding the Corps’ criticism of the Project in its comments on the Draft EIS, modifications to the Project adopted by the City in response to the Corps’ comments demonstrated a reasonable basis justifying the Corp’s approval. The Court held that where there was a back-and-forth process between the City and the Corps in modifying the Project in order to address the Corps’ concerns, there was no basis for invalidating the Corps’ ultimate decision to approve the Project—even if that decision is inconsistent with the Corps’ previous comments. Third, the Court rejected BEC’s challenge that the Corps never made an independent determination of the Project’s purpose or the size of the parcels needed to fulfill that purpose. The Court held that the Corps’ consideration of the Project’s stated purpose was reasonable given that nothing in the record suggested that the stated purpose was not genuine and legitimate. Fourth, the Court upheld the Corps’ conclusion that an alternative Project location was impractical. The Court accepted the Corps’ justification for this conclusion noting that the site was not contiguous with property already owned by the City; that the topography and geology of the site was not conducive for the purposes of the proposed development; and that the amount of property available for development was too small to achieve the overall Project purpose. Finally, the Court rejected BEC’s assertion that the Corps improperly allowed the City’s proposed off-site mitigation to relieve the City of its responsibility to adopt the LEDPA. The Court held that while the off-site mitigation was a condition of the permit, nothing in the record indicated that such mitigation was meant as an obligation in the place of the City’s responsibility to adopt the LEDPA. In sum, the Court held that the Corps stated a rational connection between the facts and the conclusion that the proposed Project site was the LEDPA. Next the Court analyzed BEC’s ESA challenge. Specifically, BEC argued that the FWS finding of no “adverse modification” conflicts with its determination that the proposed Project would destroy 234.5 acres of critical habitat for the vernal pool fairy and tadpole shrimp species, with an additional seven acres of impacts to these species’ aquatic habitat, and 242.2 acres of critical habitat for slender Orcutt grass. In rejecting this argument, the Court held that adverse modification occurs only when there is a direct or indirect alteration that “appreciably diminishes the value” of critical habitat. Further, the Court concluded that an area of critical habitat might be destroyed without appreciably diminishing the value of the critical habitat overall. In this case, the Court noted that 234.5 acres of critical habitat for the vernal pool species represented 0.1% or less of the total critical habitat for those species nationwide. Similarly, the 242.2 acres of critical habitat for slender Orcutt grass represents only 0.26% of that species’ critical habitat nationwide. Moreover, the Court found no evidence in the record that localized risk was improperly hidden by the use of large-scale analysis. The Court upheld the FWS finding of no adverse modification because it found that although a significant number of acres of critical habitat would be destroyed, no evidence in the record showed that the value of the habitat overall would be appreciably diminished. Conclusion and Implications The Court affirmed the District Court’s grant of summary judgment in favor of the agencies. The Court upheld the Corps’ determination that the Project was the LEDPA. In doing so, the Court deferred to how the City defined the Project’s purpose. The Court also upheld the FWS determination that the Project would cause no adverse modification of critical habitat, notwithstanding that the Project would destroy hundreds of acres of critical habitat for vernal pool and native grass species because nothing in the record demonstrated that the reductions to critical habitat would “appreciably diminish” the value of the species’ critical habitat overall. The Court reasoned that the Project would destroy only a fraction of the critical habitat nationwide. Based upon the Court’s conclusions in this case, it is likely that other agencies will rely on the rationale and argument used here when seeking similar CWA and ESA approvals for development from the Corps and FWS. For additional information please contact Brian Poulsen at bpoulsen@somachlaw.com. Somach Simmons & Dunn provides the information in its Environmental Law & Policy Alerts and on its website for informational purposes only. This general information is not a substitute for legal advice, and users should consult with legal counsel for specific advice. In addition, using this information or sending electronic mail to Somach Simmons & Dunn or its attorneys does not create an attorney-client relationship with Somach Simmons & Dunn. |
