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California Sportfishing Protection Alliance v. Federal Energy Regulatory Commission

 

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California Sportfishing Protection Alliance (California Sportfishing) petitioned the Ninth Circuit for review of the Federal Energy Regulatory Commission’s (FERC) decision not to initiate formal consultation with the National Marine Fisheries Service (NMFS) under the Endangered Species Act (ESA),[1] regarding the impact of the continued operation of the DeSabla-Centerville project, operated by Pacific Gas and Electric (PG&E), on threatened chinook salmon. The Ninth Circuit upheld FERC’s decision to not consult with NMFS, holding that because the DeSabla-Centerville project was operating under an existing thirty year license, there was no affirmative agency action to trigger consultation under the ESA.

In 1980, FERC issued PG&E a thirty year license to operate the DeSabla-Centerville project in Butte County, California. The project is made up of dams, reservoirs, canals, and powerhouses along Butte Creek that generate hydroelectric power. Operation of the dams impacts the flow of the creek, which serves as spawning grounds for chinook salmon. Under the license to operate the project, FERC may require PG&E to alter operations to protect fish and wildlife. In 1999, chinook salmon were listed as a threatened species under the ESA.[2] Following major fish kills in Butte Creek in 2002 and 2003, NMFS asked FERC to begin formal consultation pursuant to the ESA to determine the impact of the project on chinook salmon. However, FERC did not initiate formal consultation.[3] California Sportfishing then petitioned FERC to initiate consultation in 2004; FERC denied the petition, as well as a subsequent petition for rehearing. California Sportfishing petitioned the Ninth Circuit to review FERC’s decision not to initiate formal consultation and PG&E intervened to defend the agency’s denials.

The ESA requires consultation between an agency undertaking an action and NMFS 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.”[4] Formal consultation produces a Biological Opinion (BiOp), wherein NMFS determines whether the action will jeopardize a threatened or endangered species, or destroy or adversely modify critical habitat.[5] If NMFS determines that the action will either jeopardize a threatened or endangered species, or destroy or modify critical habitat, NMFS must issue “reasonable and prudent” alternatives to the action[6] as well as an “incidental take” statement,[7] which allows the action agency to take endangered or threatened species provided that the alternatives are implemented and the action agency complies with the incidental take statement.[8]

The Ninth Circuit first considered whether it had jurisdiction to hear the case, rejecting PG&E’s argument that it lacked jurisdiction because FERC and NMFS had begun preliminary consultation in anticipation of renewal of the license in 2009. The court stated that it had jurisdiction to review a FERC order under the Federal Power Act[9] if the order is “(1) [] final, (2) if review would not invade the discretion of the agency, and (3) if, absent review, the petitioner would suffer irreparable harm.”[10] Finding the order both final and that review would not upset the exercise of FERC’s discretion, the court considered whether California Sportfishing would suffer harm if review was withheld. PG&E claimed that California Sportfishing would not suffer harm because consultation was under way as part of the 2009 license renewal process, and would result in a BiOp outlining how to protect chinook salmon under the renewed license. The Ninth Circuit rejected PG&E’s argument, pointing out that California Sportfishing petitioned for consultation to determine what steps could be taken under the existing license to protect the chinook salmon, not under the future license. Further, the court pointed out that the BiOp to be produced as part of the renewal proceedings would only legally apply to the renewed license, not the existing license. Thus, FERC’s suggestion that it would implement any suggestions from the BiOp prior to 2009 had no legal significance. Therefore, the court determined that California Sportfishing would suffer irreparable harm if review was withheld, and accordingly, the court had jurisdiction to review FERC’s denials.

The court then turned to what it identified as the dispositive issue: “whether there was any ‘action authorized, funded, or carried out’ by a federal agency, that would have triggered the ESA’s consultation requirement in 1999.”[11] The court pointed out that the language of both the statue and its implementing regulations look to the future effect of an agency action, leading to the conclusion that only an agency action triggers consultation, not the listing of a species. The court looked to Tennessee Valley Authority v. Hill[12] to provide additional support. In that case, the Supreme Court ordered that a dam not begin operation because it would destroy the habitat of the snail darter, an endangered species. The Ninth Circuit pointed out that the Supreme Court focused on the future impact of the action–beginning to operate the dam. The Ninth Circuit also looked to Bennett v. Spear[13] for support, where the Court determined that formal consultation is required when proposed action will negatively impact a listed species.

Responding to California Sportfishing’s argument that PG&E’s continued operation of the project was an agency action under the statute, the Ninth Circuit refined the issue as “whether such ongoing operations are [] subject to the ESA.”[14] The court rejected California Sportfishing’s reliance on Turtle Island Restoration Network v. National Marine Fisheries Service, [15] a case involving the impact on sea turtles of the continued issuance of fishing permits. In that case, the Ninth Circuit determined that when the turtles were listed under the ESA, the agency had to consider the impact of the future permits on the species.[16] It was significant to the court that previously issued permits were not affected by the listing decision. In the present case, there was no continuing agency program that issued new permits; there was only continued operation of a project subject to a previously issued license.

The court analogized the present case to both Sierra Club v. Babbitt[17] and Environmental Protection Information Center v. Simpson Timber Co..[18] In Sierra Club, consultation was not required because the agency had already issued the logging company a right of way.[19] In Simpson Timber, consultation was not required because the agency had already granted the logging contractor an incidental take permit.[20] The court stated that similar to the present case, in both Sierra Club and Simpson Timber, the action of granting the permit was complete.

The court then turned to Western Watersheds Project v. Matejko[21] for the proposition that “Ninth Circuit cases have emphasized that section 7(a)(2) consultation stems only from ‘affirmative actions’ of an agency.”[22] The court pointed out that like the agency in Western Watersheds, FERC had not proposed any affirmative action to trigger formal consultation. To the contrary, PG&E, a private entity, continued to operate the DeSabla-Centerville project.

The court also rejected California Sportfishing’s reliance on Pacific Rivers Counsel v. Thomas, [23] which involved Land and Resource Management Plans (LRMPs) that controlled projects in two national forests. In that case, the Ninth Circuit determined that following the listing of the chinook salmon as endangered, the U.S. Forest Service had to initiate consultation on the LRMPs because they impacted all future projects in the national forests.[24] Thus, the court determined that the LRMPs were “ongoing agency action” that had “an ongoing and long-lasting effect.”[25] The court distinguished the present case from Pacific Rivers Council on the grounds that there was nothing that had a long-lasting effect on new permits. To the contrary, the action at issue was completed in 1980, with FERC’s issuance of the license to PG&E.

In support of the determination that operation under a license is not an agency action, the court looked to the definition of “action” contained in the ESA regulations. The regulations define “action” to include “the granting of licenses, contracts, leases, easements, rights-of-way, permits, or grants-in-aid.”[26] Under this definition, issuing the license to PG&E was the agency action that would have triggered formal consultation, not continued operation under the license.

The Ninth Circuit rejected California Sportfishing’s final argument that two reopener provisions in PG&E’s license allow discretionary federal control over the license, thereby requiring formal consultation because “Section 7’s requirements apply to all actions in which there is ‘discretionary Federal involvement or control.'”[27] The court determined that because the reopener provisions give FERC discretion to decide if it wants to exercise discretion,[28] the provisions do not give FERC the requisite “involvement or control” to require consultation.

The Ninth Circuit concluded that FERC was not required to initiate consultation with NFMS because PG&E’s continued operation of the hydroelectric project under a license issued in 1980 was not ongoing agency action under the ESA. Therefore, the court denied the petition for review.


[1] Endangered Species Act of 1973, 16 U.S.C. §§ 1531-44 (2000).

[2] Endangered and Threatened Species; Threatened Status for Two Chinook Salmon Evolutionary Significant Units (ESUs) in California, 64 Fed. Reg. 50,394, 50,412 (Sept. 16, 1999).

[3] However, because PG&E’s license expires in 2009, FERC and NMFS have begun consultation in anticipation of the renewal of the license. See 50 C.F.R. § 402.11 (2006).

[4] Endangered Species Act of 1973, 16 U.S.C § 1536(a)(2) (2000).

[5] 50 C.F.R. §§ 402.14(g)(4), 402.14(h)(3) (2006)

[6] Id. § 402.14(h)(3).

[7] Id. § 402.14(I).

[8] Bennett v. Spear, 520 U.S. 154, 170 (1997).

[9] Federal Power Act, 16 U.S.C. § 825(1)(b) (2000).

[10] Cal. Sportfishing Prot. Alliance v. Fed. Energy Regulatory Comm’n, 472 F.3d 593, 598 (9th Cir. 2006) (citing Steamboaters v. Fed. Energy Regulatory Comm’n, 759 F.2d 1382, 1388 (9th Cir. 1985)).

[11] Cal. Sportfishing Prot. Alliance, 472 F.3d at 594 (9th Cir. 2006); 16 U.S.C. § 1536 (a)(2) (2000).

[12] 437 U.S. 153 (1978).

[13] 520 U.S. 154, 158 (1997).

[14] Cal. Sportfishing Prot. Alliance v. Fed. Energy Regulatory Comm’n, 472 F.3d 593, 597 (9th Cir. 2006).

[15] 340 F.3d 969 (9th Cir. 2003).

[16] Id. at 977.

[17] 65 F.3d 1502 (9th Cir. 1995).

[18] 255 F.3d 1073 (9th Cir. 2001).

[19] Sierra Club, 65 F.3d at 1508.

[20] Envtl. Prot. Info. Ctr., 255 F.3d at 1079.

[21] 456 F.3d 922 (9th Cir. 2006).

[22] Cal. Sportfishing Prot. Alliance v. Fed. Energy Regulatory Comm’n, 472 F.3d 593, 598 (9th Cir. 2006), (quoting W. Watersheds Project v. Matejko, 456 F.3d at 930 (internal quotes omitted)).

[23] 30 F.3d 1050, 1052 (9th Cir. 1994).

[24] Id. at 1053.

[25] Id.

[26] 50 C.F.R. § 402.02 (2006).

[27] Cal. Sportfishing Prot. Alliance, 472 F.3d at 599 (quoting 50 C.F.R. § 402.03 (2006)).

[28] The first provision gave FERC discretionary authority to require changes in operations of the project after notice and hearing. The second provision required PG&E to make changes in its operations after FERC exercised its discretionary authority under the first provision.

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