Natomas I, 128 F.Supp.2d at 1286. In considering whether the action will jeopardize a species, the Service must evaluate the effects of the action and any cumulative effects on the listed 15 1 species. 8 50 C.F.R. § 402.14(g) (2004)
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 B. The Administrative Procedure Act
Review of final agency actions under the ESA is governed by the Administrative Procedure Act ("APA"). 5 u.s.c. § 706; Pacific Coast Fed'n of Fishermen's Ass'ns v. NMFS, 265 F.3d 1028, 1034 (9th Cir. 2001). The APA provides that the court must "hold unlawful and set aside agency action, findings and conclusions" that are "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." 5 U.S.C. § 706 (2) (A) An agency action is arbitrary and capricious if the agency failed to consider relevant factors, failed to articulate a rational connection between the facts found and the choice made, or made a clear error of judgment. Baltimore Gas & Elec. Co. v. NRDC, 490 U.S. 87, 105-06, 103 S.Ct. 2246 (1983); Pacific Coast Fed'n of Fishermen's Ass'ns, 265 F.3d at 1034; Greenpeace v. NMFS, 80 F.Supp.2d 1137, 1150 (W.D. Wash. 2000). Review under this standard is "searching and careful," but "narrow." Marsh v. Or.
Natural Res. Council, 490 U.S. 360, 378, 109 S.Ct. 1851 (1989) The court should not substitute its judgment for that of the agency, but rather must determine whether the evidence in the "Effects of the action" are the direct and indirect
effects of an action on the species or critical habitat, together with the effects of other activities that are interrelated or interdependent on that action, that will be added to the environmental baseline. 50 C.F.R. § 402.02 (2004). "Cumulative effects" are "those effects of future State or private
activities, not involving Federal activities, that are reasonably certain to occur within the action area of the Federal action subject to consultation." Id.
16 1 administrative record permitted the agency to make the decision 2 it did. Baltimore Gas & Elec. Co., 462 U.S. at 97; Occdidental 3 Eng'g Co. v. INS, 753 F.2d 766, 769-70 (9th Cir. 1985). The 4 agency decision need not be ideal, so long as the agency gave at 5 least minimal consideration to the relevant facts contained in 6 the record. Southwest Ctr. for Biological Diversity v. Bureau of 7 Reclamation, 143 F.3d 515, 523, quoting Ctr. for Marine 8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 Conservation v. Brown, 917 F.Supp. 1128, 1143 (S.D. Tex. 1996).
Deference to the agency is especially appropriate where the challenged decision relies upon the agency's expertise. Mt.
Graham Red Squirrel v. Espy, 986 F.2d 1568, 1571 (9th Cir. 1993) The court should defer to the agency's reasonable interpretation and resolution of equivocal or conflicting evidence, including conflicting expert opinions. Friends of Endangered Species, Inc. v. Jantzen, 760 F.2d 976, 986 (9th Cir. 1985); Cent. Ariz. Water Conservation Dist. v. EPA, 990 F.2d 1531, 1539 (9th Cir. 1993).
Plaintiffs challenge three of the Secretary's conclusions as arbitrary and capricious under the APA: (1) that the injury to the GGS and Swainson's Hawk will not appreciably reduce the likelihood of survival and recovery of these species; (2) that the NBHCP will minimize and mitigate the effects of any taking to the maximum extent practicable; and (3) that the City and Sutter will ensure adequate funding for the required mitigation. (Compl. ~~ 55-72.) 9 The court addresses these three contentions 9 Defendants do not contest plaintiffs' standing to
challenge the Secretary's issuance of the ITPs and approval of the NBHCP.
17 1 in the following sections.
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 III. No Jeopardy to Survival Findings
Plaintiffs allege that the Secretary erroneously concluded that development activity permitted under the NBHCP will not appreciably reduce the likelihood of the survival and recovery of the Swainson's Hawk and the GGS. 16 u.s.c. §§ 1536, 1539. At the heart of plaintiffs' argument is their contention that the Secretary gave insufficient consideration to the development that is likely to occur in the remainder of the Basin, outside the City's current boundaries and Sutter County, over the 50-year term of the NBHCP, and to the effect of this additional development on the viability and efficacy of the planned reserves and the survival of the species. (Pls.' Mot. at 19.)
Plaintiffs' arguments generally fall into three categories: (1) the Service failed to analyze the lack of binding commitments from other jurisdictions and, at the same time, erroneously relied on voluntary mitigation measures by those jurisdictions; (2) the Service failed to consider the cumulative impacts of other proposed projects in the Basin; and (3) the Service failed to consider the lack of protection of the 800-foot reserve setbacks.
A. Failure to Analyze the Lack of Binding Commitments by Other Jurisdictions
Plaintiffs argue that the Service failed to address the lack of binding commitments to the NBHCP by other entities -- namely, the County of Sacramento, the Natomas Mutual Water Company, and 18 1 Reclamation District 1000 -- and instead assumed that these 2 entities will continue their current course of conduct. 3 4
5 6
7 8
9 10
11 12
13 14
15 Plaintiffs rely on Natomas I, in which the court faulted the Secretary for issuing an ITP to the City alone, based on a regional HCP that assumed participation of five jurisdictions. 128 F.Supp.2d at 1295-96, 1299. However, unlike the 1997 HCP, the non-participation of the other jurisdictions is specifically considered and addressed in the present NBHCP; the Secretary determined that the lack of participation would not negatively impact implementation of the plan.
As to the water agencies, plaintiffs argue that the plan erroneously assumes that the water agencies will continue to maintain the network of canals and irrigation ditches that will connect the reserves. All parties agree that the connectivity of habitat provided by the irrigation system is essential to the 16 survival of the GGS. In response, defendants contend that this 17 18
19 20
21 22
23 24
25 26
issue was looked at in great detail and that, for a number of reasons, the Service reasonably concluded that hydrological connectivity would not be affected by the failure of the water districts to participate. First, the Service found that connectivity corridors will remain open because they will continue to be needed for drainage and irrigation of agricultural lands. (AR 1611-14.) Of course, this assumes that much of the Basin will continue in agriculture, a point addressed further below, but if this assumption is correct then irrigation canals will still be necessary. The Service further analyzed whether 19 1 current management practices by farmers and the water agencies 2 are sufficient to protect the snake as it moves through the 3 corridors and concluded that they are. (Id.) Second, the Service 4 reasoned that any decision by the water agencies to close or fill 5 the canals would necessarily require further federal
6 consultation, either because the activity would result in a 7 "taking" under the ESA or because it would require a§ 404 Clean 8 Water Act permit, and that any adverse impacts to the GGS could 9 be mitigated at that time. (Id.) Third, the Service noted that 10 the NBHCP includes other measures to protect connectivity, 11 including yearly evaluations of connectivity and the use of 12 mitigation fees to purchase canals or channels, if needed. (Id.) 13 Finally, and closely related to the third point, the Service also 14 relied on the NBC's status as a landowner and, therefore, as a 15 shareholder in the Natomas Mutual Water Company, increasingly 16 able to influence the water company's decision-making as the NBC 17 acquires new land and shares. (Id. at 1612, 1028.)
18 19
20 21
22 23
24 The issue of connectivity is discussed in the NBHCP, the BiOp, and in the Final EIR/EIS, both as part of the original analysis and in response to comments. (Id. at 134-37; 888-90, 1027-28, 1611-14, 1955-58, 1999-2000, 2005-06, 2132-44.) All of the arguments now advanced by defendants have been addressed in these documents. Taken together, the four considerations advanced by the Service rationally explain how connectivity will 25 be maintained. It cannot fairly be said that the Service and, by 26 extension, the Secretary, failed to consider the issue. Nor does 20 1
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 it appear, in light of the evidence in the record, that the Secretary was "arbitrary and capricious" or made a clear error of judgment in concluding that connectivity would not be
significantly affected by the failure of the water agencies to participate.
Plaintiffs similarly argue that the Secretary failed to consider the non-participation of Sacramento County and erroneously assumed that Sacramento County's land in the Basin will remain devoted to agricultural uses. (Pls.' Mot. at 19-21.) The NBHCP and the BiOp do assume that development in the Basin will be limited to the 17,500 acres in the permit areas and relies on that assumption in concluding that sufficient habitat will remain for the covered species. (AR 1026.) This assumption is based on the current land use plans of Sacramento County. (Id. at 121, 1055.) The NBHCP, BiOp, and EIR/EIS also conclude that because any future development in the Basin not covered by the HCP and ITPs would likely result in injury to listed species, any future development in the Basin would require new federal approvals. Any such approvals would in turn require a new HCP and ITP for the particular project, and could also lead to revision of the existing NBHCP, were the additional development to exceed the assumed limits in the NBHCP. (Id. at 121, 1055, 1617-32.) The court previously upheld reliance of the Service on the general plans of the City, Sutter, and Sacramento County to determine the probable extent of development and the likely impacts to the covered species. Natomas I, 128 F.Supp.2d at 21 1 1296. Although these plans can be changed, they are the best 2 current information about future development. Given that any 3 development outside of the NBHCP would be subject to its own 4 environmental review, the decision of the Service to rely on the 5 general plan of Sacramento County to predict future development 6 in Sacramento County is not unreasonable. 10
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
Plaintiffs also argue that the Service ignored the
development of "agricultural-residential rural estates" and other small projects in Sacramento County whose impacts have not, and will not, be mitigated. (Pl s . ' Reply at 8, 14 -15, 2 0- 2 2 . ) However, the impacts of such developments were considered in the NBHCP and the EIR/EIS, and their impact was determined to be small. ( AR at 61 , 1 6 3 0 , 1 9 7 9 , 2 0 8 2 - 8 3 . ) The Service considered these developments and rationally determined that they would not result in jeopardy to the covered species.
Finally, plaintiffs cite a number of cases for the
proposition that the Service cannot rely on "voluntary" and "speculative" mitigation measures by the water agencies, 10 One of the benefits of a regional HCP is that it removes the incentive to be among the first to develop and the potential unfairness to those landowners who, for whatever reason, choose to develop at a later time. Those who develop at the end of the line may find that they cannot obtain an ITP because so much habitat has already been affected by earlier development. The same dynamic occurs as between regional HCPs. Thus, the decision not to participate in the NBHCP may place Sacramento County in a more difficult position if it later seeks an ITP. Thus, while plaintiffs contend that future development will vitiate the NBHCP, it is more likely that, if future development in the County will have this effect, the Secretary will decline to issue ITPs for development in the County or will insist on mitigation that may be considerably greater than that required by the NBHCP. 22 1 individual landowners, or Sacramento County in reaching a no- 2 jeopardy conclusion. (Pls.' Mot. 21-22 n.12; Pls.' Reply at 13.) 3 However, in the cases cited by plaintiffs, the Service assumed 4 that the third-party would undertake affirmative acts that would 5 mitigate injury to a species, even though those actions were 6 speculative or voluntary. In this case, by contrast, the Service 7 merely evaluated the baseline conditions in the Basin and 8 concluded, based on articulated reasons, that those conditions 9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
were not reasonably likely to change without further federal review and approval.
Accordingly, the Secretary's finding that the failure of other jurisdictions to participate in the NBHCP does not undermine its effectiveness is not arbitrary, capricious or clearly erroneous. The fatal flaw of the earlier HCP was that it was a regional conservation plan that assumed all jurisdictions would participate and gave no attention to the possibility that some would not. 128 F.Supp.2d at 1291. This plan, by contrast, focuses on the two permit tees and explains why further development or action by any other entity would require additional federal approvals. The plan does not assume or require the participation of any third parties to be effective.
Plaintiffs' claim that the plan depends on the voluntary actions of third-parties is without merit.
B. Failure to Consider the Cumulative Impacts of the Joint Vision MOU and Other Proposed Projects
Plaintiffs argue that the Service failed to undertake an 23 1 adequate cumulative effects analysis, as required by the ESA, 2 because it failed to consider the impacts of the so-called "Joint 3 Vision" development and other proposed projects. (Pls.' Mot. at 4 22-31.) Specifically, plaintiffs focus on a Memorandum of 5 Understanding entered into in December 2002 by the City of 6 Sacramento and Sacramento County, commonly referred to as the 7 "Joint Vision MOU," which sets forth several principles for going 8 forward with annexation and urbanization of 10,000 acres in 9 Sacramento County currently designated for agricultural use. 10 This 10,000-acre area is not part of the 17,500 acres that 11 the NBHCP projects for development in the entire Basin and, were 12 development of the 10,000 acres to occur, this might well be a 13 significant change in circumstances that could destroy the 14 effectiveness of the NBHCP. Because the "Joint Vision MOU" is by 15 16
17 18
19 20
21 22
23 24
25 26
no means a concrete plan for development, the court finds that the Service was correct in finding that the lands covered by the MOU are not reasonably likely to be developed and, therefore, need not be the subject of a cumulative effects analysis.
The purpose of the Joint Vision MOU is to "define a mutually acceptable set of proposed principles that the City and [Sacramento] County are prepared to consider when considering future land use planning" in the Basin. (AR 2374.) The
principles set forth are "intended to guide future discussion and the ultimate negotiation of an agreement between the County and the City." (Id. at 2377.) The MOU asserts that growth in the Basin is "inevitable," and assigns to the City the primary 24 1 responsibility for planning new growth in the area. (Id. at 2 2373, 2375.) However, the MOU also contemplates that any 3 implementation of its principles will require discretionary 4 legislative actions by the relevant land-use jurisdictions and 5 further state and federal environmental review. (Id. at 2374- 6 7 5.)
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
The ESA requires the Service, in evaluating whether the ITP will affect the likelihood of survival and recovery of the covered species, to consider "cumulative effects" on the species. 50 C.F.R. § 402.02 (2004). These effects are defined to include the "effects of future state or private actions, not involving federal activities, that are reasonably likely to occur." Id.
By negative implication, the Service is not required to analyze the effects of future federal actions. Similarly, it is not required to analyze non-federal actions that are not reasonably likely to occur. Future federal actions include actions that require federal authorization, through permitting or funding.
Loggerhead Turtle v. County of Volusia, 120 F.Supp.2d 1005, 1017 n.20 (M.D. Fla. 2000); Cal. Native Plant Soc.'y v. Norton, 2004 WL 1118537 at *14 (S.D. Cal. Feb. 10, 2004). Although the regulations do not define when an effect is "reasonably certain" to occur, the FWS HCP Handbook offers the following
explanation 11 :
11 Defendants argue that the Handbook is entitled to
deference under the standard set forth in United States v. Mead Corp . , 5 3 3 U . S . 218 , 2 2 6- 2 7 , 121 S . Ct . 2 1 6 4 ( 2001 ) . Plaintiffs do not dispute that the interpretation of "reasonably certain" in the Handbook is entitled to deference, nor do they offer an 25 1
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 the more State, tribal, or local administrative
discretion remaining to be exercised before a
proposed non-federal action can proceed, the less
there is a reasonable certainty the project will be
authorized. Speculative non-federal actions that may
never be implemented are not factored into the
cumulative effects analysis . The action agency
should consider the economic, administrative, and legal hurdles remaining before the action proceeds.
United States Fish & Wildlife Service and National Marine Fisheries Service, Endangered Species Act Consultation Handbook 4-30 (1998).
In support of their argument that the "no jeopardy" finding was arbitrary and capricious in light of the cumulative effects on the species, plaintiffs contend: (1) the additional 10,000 acres of development proposed in the MOU is reasonably certain to occur; (2) the development of this acreage fatally undermines the NBHCP; (3) the development will not necessarily require further federal approval; and (4) the Service was required to consider its effects upon the species covered by the ITP but failed to do alternate interpretation of the term. In enacting the ESA, Congress gave the Service authority to promulgate binding regulations. 16 U.S.C. § 1540(f). However, the Handbook definition is not a regulation, but a mere interpretation of a regulation. The court in Mead explicitly found that
interpretations contained in agency manuals are not entitled to the highest level of deference. 533 U.S. at 234. Nonetheless, a court may still defer to an agency's interpretation of its own regulation, depending upon "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control." Id. at 227-230, 234-38, quoting Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161 (1944). Applying this standard, the court finds that the Service's interpretation is entitled to deference and is a reasonable construction of the regulation.
26 1
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 so. (Pls.' Mot. at 22-31.)
In concluding that development of the 10,000 acres within the Joint Vision MOU was not "reasonably certain," the Service relied on the numerous discretionary steps remaining before any development could occur, and the preliminary nature of the Joint Vision MOU. These discretionary steps include: land-use planning, environmental review, biological resources evaluation, compliance with local, state, and federal laws, and approval of the plan by the City, County, and Local Agency Formation Commission ("LAFCO"). (AR 161 7.) If these regulatory hurdles are surmounted, further review will be required by federal agencies under the ESA and the NBHCP.
Furthermore, the Joint Vision MOU is only a "conceptual agreement" designed to "establish principles to form the parameters of a future agreement or agreements." (Id. at 2373.) The MOU is not a concrete development proposal establishing a set level of development or land use patterns. (Id. at 2373-77.) No funds are committed. (Id.) The MOU does not change the existing agricultural-use designation for any of the 10,000 acres. (Id. at 2374.) The MOU does not waive any existing land use
requirements but explicitly contemplates the necessity for further discretionary approvals and environmental review. (Id.) Given the tentative, general nature of the MOU and the
considerable number of local, state, and federal approvals that would be required before any development of the 10,000 acres could occur, the Service did not err in determining that the 27 1
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 Joint Vision development was not reasonably certain to occur and need not be considered by the Service in conducting its jeopardy analysis.
In addition, the Service reasonably concluded that the MOU would require federal action because any future development will require: (1) a new ITP and therefore a new evaluation by the Service of possible injury to protected species from that development if the ITP is approved; and (2) a reevaluation of the efficacy of the NBHCP in light of the proposed development.
Indeed, the City has a powerful incentive to assure that development under the MOU is consistent with federal
requirements; through the implementation agreement, the City has committed to ensuring that additional development does not occur in the Basin without federal review. Thus, were the MOU lands to develop without federal review -- an unlikely prospect given that the MOU assigns control to the City -- the City could face revocation of its existing ITP under the NBHCP. (Id. at 20-21.) Therefore, any further development will necessarily be a federal action because further federal approval will be required under any scenario that could impair the efficacy of the NBHCP. 12 The 12 Plaintiffs cite two cases for the proposition that the MOU must be considered now as a cumulative impact. Neither case is binding and neither is on point. In NWF v. Norton, 332 F.Supp.2d 170,177-79 (D.D.C. 2004), the court found that the Service entirely ignored small-scale state and local projects that were reasonably certain to occur and, in fact, ignored its own conclusion that habitat degradation was a significant threat to the panther. Here, the Service explicitly considered the possibility of additional development and determined that any development would be subject to additional federal review. In Nat'l Wildlife Fed'n v. Nat'l Marine Fisheries Serv., 2005 WL 28 1 Service is entitled to assume that private individuals and the 2 relevant agencies will seek the required federal approvals before 3 proceeding with activities that could result in a taking of a 4 protected species. Natomas I, 128 F.Supp.2d at 1298. The 5 determination of the Service that any development under the Joint 6 Vision MOU would be a federal action and, therefore, need not be 7 included in the cumulative effects analysis, is not arbitrary or 8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 clearly erroneous, particularly given that development of the 10,000 acres is not "reasonably certain" to occur.
C. Impact of the Joint Vision on the Acquisition of Reserves Plaintiffs argue that, in addition to the direct destruction of 10,000 acres of habitat through the Joint Vision development addressed above, the Service also should have considered the probable effect of the Joint Vision development on the ability of the NBC to acquire sufficient reserves. (Pls.' Mot. at 30.) Plaintiffs argue that, of the 53,000 acres in the Basin, 7,000 acres are already developed, 17,500 acres are approved for development under the NBHCP, and 10,000 are contemplated for development under the Joint Vision, leaving only 18,000 acres for mitigation of the impacts of both the NBHCP development and the Joint Vision development.
Plaintiffs' scenario is unlikely and, more importantly, is 1278878 at *18-21 (D.Or. 2001), the court held that the agency had the discretion to consider the impacts of future actions that were reasonably certain to occur, even though such actions would require additional federal approvals, not that it was required to do so.
29 1 adequately addressed in the record. First, as discussed above, 2 at this point, the Joint Vision development is not reasonably 3 likely to occur. Second, if and when a concrete development 4 proposal is put forth, it will be the subject of additional 5 federal and state environmental review. The Service, and the 6 court, are entitled to assume at this point that future 7 development will not be permitted if sufficient mitigation land 8 is unavailable and the development will result in jeopardy. 13 9 Furthermore, the NBHCP provides a fail-safe measure to ensure a 10 sufficient supply of mitigation land. The NBHCP provides that, 11 if off-site mitigation land is not available for purchase by the 12 NBC, development must either stop or the developer must provide 13 an in-lieu dedication of sufficient mitigation land. (AR 804.) 14 Finally, the EIR/EIS did consider the impact of the Joint Vision 15 on the acquisition of mitigation lands, but concluded that it was 16 not a pressing concern at this time, for the reasons addressed 17 above. (Id. at 1618.) For these same reasons, the court finds 18 19
20 21
22 23
24 25
26 that the Service did not clearly err in concluding that the Joint Vision MOU does not vitiate the NBHCP.
D. Other Proposed Developments
Finally, plaintiffs argue that the Service erred in failing 13 The court notes, however, that the Service and those seeking an ITP in the future will face an uphill battle if they attempt to argue that additional development in the Basin beyond 17,500 acres will not result in jeopardy. The NBHCP, BiOp, EIR/EIS, and Findings and Recommendations are all predicated on the assumption that development in the Basin will be limited to 17,500 acres and that the remaining lands will remain in a gr i cu 1 tu r al use . ( AR 2 0 - 2 4 , 8 6 2 , 8 6 6 - 6 7 , 11 7 1 - 7 2 , 1 61 7 - 1 8 . ) 30 1
2 3
4 5
6 7
8 9
10 11
12 to analyze the cumulative impacts of other specific development proposals moving forward in the Basin. (Pls.' Mot. at 22-27.) However, the final EIR/EIS specifies that all of these projects will require future federal approval because they are not covered by any of the ITPs issued under the NBHCP. (AR 1624-31.) Moreover, the record reflects multiple reasons why the Service concluded that these developments are not reasonably certain to occur: (1) the areas are not currently planned for urban development under existing land use plans; ( 2) the lands are located outside the City's sphere of influence, the City limits, and the urban services boundary; (3) no urban services are available; and (4) there are significant legal and planning 13 hurdles to development. (Id. at 1055, 1216, 1614-32.) 14 15
16 17
Plaintiffs, by contrast, present no evidence in the record showing that these projects are anything more than the optimistic day dreams of developers. In light of the reasoned analysis by the Service as to why the impacts of these proposals need not be 18 considered, and in the absence of any evidence that the Service 19 20
21 22
23 24
25 26
made a clear error of judgment, the decision to exclude consideration of these projects was not arbitrary or clearly erroneous.
E. Failure to Consider the Lack of Protection of Setbacks Finally, plaintiffs argue that the no-jeopardy conclusion was erroneous because it depends on 800-foot setbacks for the reserve lands but does not protect the setbacks from development. (Pls.' Mot. at 32; Pls.' Reply at 26.) As discussed above, one 31 1 of the acquisition criteria for reserve lands is that they should 2 be located at least 800 feet from lands currently designated or 3 used for urban development. (AR 889.) The plan does not 4 contemplate that the setback lands will be acquired by the NBC, 5 but assumes that the setback areas will be agricultural lands 6 within the Basin. (Id. 889-90.) However, after reserve lands 7 are acquired, the setbacks are not required to be managed in any 8 particular fashion and later could be used for urban development.
Plaintiffs argue that the failure to protect the setbacks 10 fatally undermines the no-jeopardy conclusion. (Pls.' Mot. at 11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
32; Pls.' Reply at 26.)
However, the Service explicitly stated in the BiOp that the setbacks are not a permanent aspect of the mitigation program but are, instead, a mere acquisition criteria, to be considered and achieved, if possible. (AR 889-90.) Therefore, the Service's no-jeopardy conclusion did not erroneously assume or depend on permanent protection of the 800-foot setbacks. Moreover, the NBHCP provides for re-evaluation of the status and adequacy of the setback criteria during the mid-point reviews. (Id. at 142-
3.) The Service's determination that the reserve system would prevent jeopardy to the GGS and Swainson's Hawk considered the potential impact of development in the setback zone. This determination was not arbitrary or capricious.
F. Summary
In sum, plaintiffs have not pointed to evidence
demonstrating that the "no-jeopardy" finding was arbitrary and 32 1 capricious. Although the Secretary did not reach the conclusions 2 plaintiffs desire, the record indicates that the Secretary 3 considered the relevant factors and articulated a rational 4 connection between the facts found and the conclusions reached. 5 The Service addressed the non-participation of other agencies, 6 considered the potential Joint Vision development plan, and did 7 not depend on the 800-foot preferred setbacks in reaching the no- 8 jeopardy conclusion.
9 clearly erroneous.
The no jeopardy finding is not arbitrary or
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 IV. Mitigate to the Maximum Extent Practicable
Prior to issuing an ITP, the Secretary must determine that the permit applicant will, to the maximum extent practicable, minimize and mitigate the impacts of the taking. 16 u.s.c. § 1539(a) (2) (B) (ii). There are two components to this finding: ( l) the adequacy of the mitigation program in proportion to the level of injury -- take -- that will result; and (2) whether the mitigation is the maximum that can be practically implemented by the applicant. Metro Air Park, 306 F.Supp.2d at 927-28. two factors are evaluated on a sliding scale, such that a stronger showing on one factor may compensate for a weaker These
showing on the other. Id. For instance, where the habitat lost is of minimal or nd value to the covered species and the mitigation plan more than compensates for the level of injury, the applicant need not do more, even if it would be financially feasible. Id. at 928. Here, plaintiffs assert that the
Service's findings on both aspects are arbitrary and capricious. 33 1
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 A. Proportionality to the Injury
Plaintiffs argue that the Service erred in finding that the .5-to-l mitigation ratio sufficiently compensates for the injury that will occur to the GGS and the Swainson's Hawk as a result of the development authorized by the ITPs.
1. Giant Garter Snake
(Pls.' Mot. at 35.)
As a result of the development authorized by the ITPs, 8,512 acres of GGS snake habitat will be destroyed. (AR 1021.) The Service determined that, if unmitigated, this would result in considerable harm to the GGS. (Id. at 1190.) However, this habitat will be replaced by 2,187 acres of restored marshlands and 4,375 acres of rice habitat, resulting in an effective mitigation ratio, for the GGS, of approximately .75-to-1. at 1191.)
The Service offers several reasons why the reserve lands adequately compensate for the loss of some habitat. Unlike existing habitat, reserve habitat: (1) will be protected in perpetuity; ( 2) will be actively managed for the snake; ( 3) will not be subject to the continual disturbance caused by farming or canal maintenance; ( 4) will be available year round; ( 5) will not be unavailable to the snake because of canal maintenance activities; and (6) will be relatively free of human intrusion. (Id. 1026, 1191.) The restored marsh is considered particularly valuable replacement habitat, as it is the preferred habitat for the GGS. (Id. at 1191.) The Service also emphasizes the provisions of the NBHCP that preserve connectivity and minimize 34 1
2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 disturbances during construction activity. (Id. at 1190-92.) The Service concludes that the combination of on-site
minimization measures and the new high-quality wetland habitat will effectively mitigate for the harm to the GGS of the development permitted by the ITP and the NBHCP. (Id. at 1192.) The Service's analysis considers the relevant issues and is a reasoned explanation as to why the mitigation measures are proportionate to the possible injury or take.
2. Swainson's Hawk
Two types of Swainson's Hawk habitat will be affected by the development authorized by the ITPs: nesting habitat and foraging habitat. (Id. at 1188-89.) Approximately 80% of the nesting habitat in the Basin, most of it in the Swainson's Hawk Zone, will remain after the authorized development. (Id. at 1032.) Although four nest trees will be removed as a result of the authorized development, the City has committed to planting 60 replacement nesting trees. (Id. at 1033.) The Service
determined that this was adequate to mitigate for the removal of nest trees and the small loss of nesting habitat, particularly given that most of the nesting trees in the area of authorized development are not active. (Id. at 1034.) Plaintiffs do not point to any evidence in the record to contradict this
conclusion, or any evidence that the Service should have considered, but did not. The Service evaluated the available scientific information and reached a reasonable conclusion that the effects to nesting habitat would be fully mitigated. 35 1
2 3
4 5
6 7
8 The impact to Swainson's Hawk foraging habitat is
quantitatively more significant. Approximately 40% of the Basin's potential foraging habitat, some 9,188 acres, will be lost as a result of the authorized development. (Id. at 1034.) The NBHCP provides for acquisition of 2,187.5 acres of high quality upland foraging habitat. (Id. at 731.) Approximately 1,000 acres of additional foraging habitat will be available through the fallowed rice lands and upland components of the 9 managed marsh. (Id. at 732.) However, even with the reserve 10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 lands, there will be a net loss of approximately 6,000 acres of potential foraging habitat.
Nonetheless, the Service concludes, for reasons discussed at length in the BiOp, the Findings and Recommendations, and an Addendum to the EIR/EIS, that the loss of this habitat would result in a low level of harm to the hawk if mitigated as required by the NBHCP. (Id. at 1034-39, 1189-90, 726-47.) The Service concludes that despite the quantitative losses in habitat, the replacement habitat will likely be qualitatively equivalent. (Id.) The technical memorandum identifies at least three reasons why the Swainson's Hawk will not be negatively affected by the loss of habitat. First, the 2,187.5 acres of replacement habitat will all be of high quality, managed specifically for the hawk. (Id. at 731.) Even under the worst- case implementation scenario, where more than half of the reserve lands would consist of current high-value habitat, rather than newly created high-value habitat, the NBHCP will result in an 36 1 increase of 353 acres of high-value habitat. 14 (Id. at 742.) 2 3
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 Second, under the NBHCP, the temporal availability of foraging opportunities would be maintained or improved. (Id.) Under current conditions, much of potential foraging habitat is available in September, when row crops such as corn are harvested, and in June. (Id. at 737.) By contrast, relatively little foraging habitat is available during the other months the Swainson's Hawk is in the Basin -- April, May, July, and August. (Id.) Under the most likely implementation scenarios for the NBHCP, foraging opportunities would be increased during the months of April, May, and June, with the anticipated effect of increasing nesting density and reproductive success. (Id. at 740-41, 744.)
Third, the acquired reserves will likely be in closer
proximity to nesting trees. (Id. at 745.) A primary acquisition criteria for upland reserves is proximity to known or potential nesting trees. (Id. at 156.) Proximity of foraging habitat to nesting trees has been linked to reproductive success for the Swainson's Hawk. (Id. at 738.) For all of these reasons, the Service concludes that any harm to the Swainson's Hawk as a result of lost foraging lands will be effectively mitigated by the reserve lands. The Service considered the relevant
scientific evidence in the record and articulated reasons for its 14 The analysis also offers several reasons why this
situation, "Scenario 3," is not likely to occur. (AR 745.) Instead, Scenario 1 or 2, which both result in a net increase of 1,455 acres of high-value habitat, are determined to be more likely to occur. (Id.)
37 1
2 3
4 ultimate conclusion that the mitigation was sufficient.
In response to this technical analysis, plaintiffs point to a letter from James Estep, a leading expert on the Swainson's Hawk and Chair of the Swainson's Hawk Technical Advisory 5 Committee. (Id. at 1244-46.) In his letter, Estep references 6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 earlier comments submitted by the Swainson's Hawk Technical Advisory Committee, which indicated that increased foraging habitat is needed to protect the Swainson's Hawk from losses.
He then criticizes the technical analysis prepared in
response to these comments. (Id.) Specifically, while Estep admits that it is "literally possible" to double rodent production on half the foraging land, he asserts that this concept has "since been widely dismissed." (Id. at 1245.) calls Appendix Kan "attempt to construct models designed to justify the same flawed biological reasoning." (Id.)
He
This single letter from a respected expert is insufficient to show that the Service's conclusions are arbitrary or clearly erroneous. The Service responded to early comments with an extensive technical analysis of the effectiveness of the mitigation strategy, with references to multiple expert reports to support its conclusions. (Id. at 727-49.) Although Estep asserts that the conclusions of Appendix Kare "flawed," he does not offer any explanation as to why the conclusions are flawed or offer any expert opinions to contradict these conclusions.
Moreover, the court defers to the agency's reasonable resolution of conflicting opinions from experts, since the Service's 38 1 wildlife experts are in a much better position than the court to 2 evaluate such evidence. See Friends of Endangered Species, Inc., 3 760 F.2d at 986; Cent. Ariz. Water Conservation Dist., 990 F.2d 4 at 1539. Finally, although plaintiffs fault the Service for 5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
approving an HCP with less than a one-to-one mitigation ratio and cite other HCPs from surrounding areas that have higher ratios, they provide no evidence that these HCPs cover the same species, involve the same quality of habitat issues, or involve the same economic or demographic variables.
Based on the evidence in the record, the Secretary's
determination that the mitigation was proportionate to the expected take of the GGS and Swainson's Hawk is not arbitrary or capricious. However, because the NBHCP results in a net loss of habitat, including moderate and high value habitat, for both the GGS and the Swainson's Hawk, this is not one of those rare cases where the habitat to be developed is of such low value that the feasibility of further mitigation is irrelevant.
B. Feasibility of Further Mitigation
Plaintiffs argue that the Service erroneously relied on the permittees' analysis of the feasibility of additional mitigation, rather than conducting an independent analysis of practicable alternatives. (Pls.' Mot. at 36-37.) Plaintiffs also argue that even the economic analysis prepared by the City and Sutter supports a higher mitigation ratio. (Id. at 30.) The economic analysis prepared by the permittees indicates two reasons why increased mitigation, specifically a 1-to-l mitigation ratio, 39 1 would not be practicable or feasible: (1) the mitigation fees 2 charged under the NBHCP are already substantially higher than 3 fees charged under the HCPs in other California jurisdictions; 4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 and (2) the fees that would be charged under a higher mitigation ratio might well push the costs of development beyond the industry standard of feasibility. ( AR 4 4 1 - 4 4 4 , 4 5 5 - 5 7 . ) On the first point, the economic analysis compares the
proposed NBHCP mitigation fees to costs under the City of Bakersfield HCP, the City of Coalinga HCP, the South Sacramento HCP, and the Yolo County HCP and finds that the fees charged by these jurisdictions are substantially lower than the fees proposed under the NBHCP. (Id. at 457.) However, this analysis is not dispositive on the question of feasability because the level of mitigation fees the market will bear is tied to the relevant real estate market and the land-use composition of the development. Therefore, without any evidence that the lands covered by these HCPs have similar market conditions and land-use plans, these comparisons are of little value in determining the feasibility of a higher mitigation fee under the NBHCP.
However, the expert economic analysis also evaluates the market conditions in the Sacramento region and analyzes the effect of the proposed fees on the cost-effectiveness of the proposed development, looking at the cost burdens imposed by the combination of the proposed NBHCP fees and infrastructure fees, such as fees for schools, water, wastewater, and traffic. at 441-44, 457-60, 494.) The analysis finds that the estimated 40 1 total fees for residential development within the permit areas 2 would be approximately 13-14% of the estimated sales price of a 3 residential unit. (Id. at 441.) It also finds that a 15% fee 4 burden is generally the "feasibility benchmark" for residential 5 development, although a 20% cost burden may be feasible, 6 depending on specific financial considerations. (Id.) 7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
The analysis determines that alternatives calling for
increased mitigation would not push the cost burden beyond the 15% benchmark under current conditions, but offers two reasons why increased mitigation might become infeasible. First, the analysis notes the City originally adopted a low infrastructure fee for the North Natomas area that eliminated certain funding and programs, including funding for police, fire services, bike trails and community center facilities. (Id. at 441, 443, 457-
60.) However, that fee program is currently under revision, and the development impact fees are anticipated to increase, raising the overall fee burden. (Id.) Second, because the mitigation fees are not capped, and land acquisition prices are rising rapidly, the mitigation fees might be increased substantially to generate the funds necessary to buy mitigation lands. The analysis notes that this is particularly likely if mitigation is required at a 1-to-1 ratio, because developable land would become even more scarce. (Id.)
The Findings and Recommendations consider the economic
analysis offered by the permittee and also offer three further reasons why additional mitigation is impracticable. (Id. at 41 1 1193.) First, the Findings and Recommendations point out that 2 there is no cap on the mitigation fee over the 50-year term of 3 the plan. Second, the Service notes that the mitigation 4 fee more than doubled since the time the economic analysis was 5 prepared, so that the cost burdens might now be at or past the 6 industry benchmarks of feasibility. What was theoretical 7 at the time the economic analysis was prepared, has become the 8 reality. Finally, the Findings and Recommendations state that 9 further fee increases are expected in the future, which could 10 push costs beyond the industry benchmarks for feasibility. (Id.) 11 Plaintiffs contend that: (1) the project applicants did not 12 examine an adequate range of alternatives; (2) the economic 13 analysis does not support the finding of "impracticability"; and 14 (3) the Service's two-page analysis is insufficient to support 15 the finding of impracticability. (Pls.' Mot. at 38-39.) As to 16 the first argument, defendants did consider two alternatives that 17 called for an increased mitigation ratio. (AR 3351.) 18 Plaintiffs do not indicate what other alternatives should have 19 been considered or cite any legal precedent to support this 20 position. (Pls.' Reply at 36.) Plaintiffs' second argument 21 that the economic analysis does not support a finding of 22 impracticability -- is based on a flawed interpretation of the 23 word "practicable" as used in the statute. Plaintiffs assert 24 that since the economic analysis does not state that increased 25 fee levels are totally infeasible, the City and Sutter have not 26 met their burden of showing that additional mitigation would be 42 1 impracticable. (Id. at 37-38; Pls.' Mot. at 39.) As this court 2 previously found in Metro Air Park, 306 F.Supp.2d at 928 n.12, 3 "practicable" as used in the ESA does not simply mean "possible," 4 as opposed to impossible, but has the more nuanced meaning of 5 "reasonably capable of being accomplished." The economic 6 analysis noted a number of uncertainties that could push the fee 7 burden beyond the feasibility benchmark and doom all development. 8 In light of these uncertainties, and the rapid rise in fees noted 9 in the Findings and Recommendations, the Service rationally 10 concluded that additional mitigation was not "reasonably capable 11 of being accomplished" without jeopardizing the proposed 12 development. Ultimately this question is not a matter of 13 arithmetic based on firm figures and projections but a judgment 14 call given the uncertainties of the real estate market and the 15 various other factors that affect development costs and rewards. 16 In the circumstances here, particularly in light of rapidly 17 rising land costs, the Secretary's finding represents a 18 reasonable judgment.
19 20
21 22
23 24
25 26
Plaintiffs' final argument is that the Service abrogated its duties by relying on the analysis of the permit applicants to determine whether additional mitigation would be practicable.
However, the case relied on by plaintiffs, Gerber v. Norton, 294 In F.3d 173, 185 (D.C. Cir. 2002), is readily distinguishable.
Gerber, the Service relied on the developer's word that the proposed alternative was impracticable, without any supporting analysis. 294 F.3d at 185. Here, the City and Sutter provided 43 1 an extensive expert analysis to substantiate the conclusion that 2 additional mitigation was not practicable. Furthermore, the 3 Service went beyond the information provided by the City and 4 Sutter, noting, for instance, that mitigation fees had increased 5 6
7 8
9 10
11 12
13 14
15 16
17 18
19 20
21 22
23 24
25 26
significantly since the economic analysis was prepared. 15 Based on the foregoing analysis, the finding of the
Secretary that the NBHCP would minimize and mitigate the impacts of the proposed action to the maximum extent practicable is not arbitrary and capricious. The Service and the Secretary evaluated both proportionality and practicability and rationally determined that the proposed level of mitigation: (1) would effectively compensate for the injury to species that would occur under the ITPs; and (2) was the maximum practicable in the circumstances.
V. Failure to Ensure Adequate Funding
Plaintiffs' final claim is that the NBHCP fails to ensure adequate funding for the plan, as required by 16 U.S.C. § 1539 (a) (2) (B) (iii). (Pls.' Mot. at 40.) Plaintiffs make three arguments as to why funding is not ensured: (1) the NBHCP relies on unfunded voluntary measures such as setbacks and connectivity; 15 Plaintiffs also contend that the Service had a duty to inquire whether a modified development scenario -- for example, commercial as opposed to residential -- would have been possible and permitted additional mitigation. (Pls.' Reply at 37-38.) However, plaintiffs have not provided any legal precedent for this position and the court previously rejected a similar argument. See Metro Air Park, 3 0 6 F. Supp. 2d at 92 8 (holding tl1at. it is best to "avoid unduly enmeshing the Service in developers' economic affairs and projections.")
44 1 (2) the permittees have not "guaranteed" that they will fund the 2 mitigation plan in the event that the developer fees prove 3 inadequate; and (3) developers are immune from retroactive fee 4 increases. (Id.; Pl.'s Reply at 39-41.) With regard to the 5 first argument, as discussed above in Section III.A, the NBHCP 6 does not rely on unfunded voluntary measures to ensure success 7 funds are provided for ensuring connectivity and the plan does 8 not "rely" on the 800-foot setback zones, which are merely a 9 preferred acquisition criteria. ( AR 13 5 , 14 0 - 4 1 . ) 10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 The second and third arguments are based on the same hypothetical fact scenario. Plaintiffs assert that since the fees will be set and then paid by developers on an annual basis, the fees collected may be insufficient if property costs increase between the time the fees are collected and the time mitigation lands are purchased. (Pls.' Mot. at 40.) As a result,
plaintiffs argue, funding for the NBHCP has not been "ensured" by the City and Sutter. 16 However, the NBHCP includes
several fail-safe provisions to protect against rising land costs during the period between collection of fees and acquisition of reserve lands. First, the NBHCP requires the NBC to maintain a 200-acre "cushion" of reserve lands, so that development will not outpace the acquisition of mitigation land. ( AR 2 1 3 - 1 4 . ) 16 Plaintiffs point to some speculation by the court in Natomas I "that it is not clear that a funding mechanism that is not backed by the applicant's guarantee could ever satisfy the requirement of § 1539 (a) (2) (B) (iii)." This language is not holding and merely raises a question that is answered in this opinion.
45 1 Second, if land acquisition costs increase before the City and 2 Sutter have an opportunity to adjust the mitigation fees, the 3 developer can be required to dedicate land rather than paying the 4 fee. (Id. at 804, 1195.) Although plaintiffs argue that 5 "funding shortfalls" are still possible with land dedications, 6 the court fails to see how this could occur; if there is a 7 dedication of the requir~d mitigation land, the landowner will 8 not have to pay the land acquisition component of the mitigation 9 fee, and the NBC will obtain the appropriate amount of reserve 10 land. Third, the "catch-up" fee ordinances further protect 11 against rising land costs, as they narrow the window between fee 12 payment and acquisition of mitigation land. (Id. at 212.) 13 Finally, unlike the funding mechanism found inadequate in Natomas 14 I, the mitigation fees are not capped under the NBHCP, so that 15 fees can be increased to compensate for rising land costs. 16 17
18 19
20 21
22 23
24 25
26 at 212.)
In the Findings and Recommendations, the Service relied on all of these elements to find that the City and Sutter had adequately ensured funding for the plan. (Id. at 1194-96.) While it is true, as plaintiffs assert, that developers are protected from retroactive fee increases, plaintiffs have not pointed to any evidence in the record suggesting that such retroactive fee increases would be necessary under the NBHCP.
The NBHCP is structured to avoid the need for retroactive fee increases through foresight and advance planning. Plaintiffs have not shown that the NBHCP, as structured, will not adequately 46 1 fund the required mitigation. The finding of the Secretary that 2 the plan adequately ensures funding is not arbitrary or 3 capricious.
4 5
6 7
8 9
10 11
12 13
14 15
16 17
18 19
20 21
22 23
24 25
26 VI. Conclusion
For the foregoing reasons, defendants' motion for summary judgment is GRANTED and plaintiffs' motion for summary judgment is DENIED. The clerk shall enter judgment.
IT IS SO ORDERED.
Dated: September 7, 2005
DAVID F. LEVI
United States District Judge
47