San Luis & Delta-Mendota Water Authority v. Haugrud

          Argued and Submitted December 12, 2016 San Francisco, California

         Appeal from the United States District Court for the Eastern District No. 1:13-cv-01232- LJO-GSA of California Lawrence J. O'Neill, Chief Judge, Presiding

          Daniel J. O'Hanlon (argued), Rebecca R. Akroyd, and Elizabeth L. Leeper, Kronick Moskovitz Tiedemann & Girard, Sacramento, California; Steven O. Sims and Dulcinea Z. Hanuschak, Brownstein Hyatt Farber Schreck LLP, Denver, Colorado; for Plaintiffs-Appellees/Cross-Appellants San Luis & Delta-Mendota Water Authority and Westlands Water District.

          Ellen J. Durkee (argued), Bradley H. Oliphant, and Anna K. Stimmel, Attorneys; John C. Cruden, Assistant Attorney General; Environment and Natural Resources Division, United States Department of Justice, Washington, D.C.; Stephen Palmer, Office of the Regional Solicitor, Department of the Interior, Sacramento, California; Carter Brown, Office of the Solicitor, Department of the Interior, Washington, D.C.; for Defendants-Appellants/Cross-Appellees Kevin Haugrud, U.S. Department of the Interior, U.S. Bureau of Reclamation, and David Murillo.

          Thomas P. Schlosser (argued) and Thane D. Somerville, Morisset Schlosser Jozwiak & Somerville APC, Seattle, Washington, for Intervenor-Defendant-Appellant/Cross-Appellee Hoopa Valley Tribe.

          Amy Cordalis and Nathan Voegeli, General Counsel, Yurok Tribe, Klamath, California; Daniel I.S.J. Rey-Bear, Nordhaus Law Firm LLP, Spokane, Washington; for Intervenor-Defendant-Appellant/Cross-Appellee Yurok Tribe.

          Before: Alex Kozinski and N. Randy Smith, Circuit Judges, and Sharon L. Gleason, ^[**] District Judge.

         SUMMARY^[***]

         Environmental Law / Water Rights

         The panel affirmed in part and reversed in part the district court's judgment, and held that the Bureau of Reclamation had the authority to implement the 2013 release of Trinity River water from the Lewiston Dam, above and beyond the amount designated in the applicable water release schedule.

         Reversing the district court, the panel held that the Act of August 12, 1955, gave the Bureau the authority to implement the 2013 flow augmentation release to protect fish in the lower Klamath River. Affirming the district court, the panel also held that the 2013 flow augmentation release did not violate Central Valley Project Improvement Act ("CVPIA") section 3406(b)(23), which called for a permanent water release that would serve only the Trinity River basin. The panel further held that the 2013 flow augmentation release did not violate California water law and, in turn, did not violate the Reclamation Act of 1902 or CVPIA section 3411(a), both of which require the Bureau to comply with state water permitting requirements.

         The panel did not reach the merits of an Endangered Species Act claim because the plaintiff water contractors did not have standing to pursue that claim. The panel held that the water contractors lacked standing because they did not demonstrate that the Bureau's alleged failure to conduct a Section 7 consultation for Endangered Species Act-listed fish species would threaten their economic interests.

          OPINION

          N.R. SMITH, Circuit Judge.

         In late summer 2013, the Bureau of Reclamation ("BOR") released Trinity River water from the Lewiston Dam, above and beyond the amount designated in the applicable water release schedule (a schedule that was devised to benefit only the Trinity River basin). That water flowed down the Trinity River and into the lower Klamath River, where winter-run salmon were beginning their migration upriver to their spawning grounds. BOR released the water to help prevent a mass die-off of these salmon in the lower Klamath, which are threatened when the Klamath River runs low. BOR asserted that the Act of August 12, 1955, ("1955 Act") gave it the power to release this extra water. The 1955 Act "authorized and directed" the Secretary of the United States Department of the Interior ("DOI") "to adopt appropriate measures to insure the preservation and propagation of fish and wildlife." We agree with BOR. The broad language of this clause gave BOR the authority to implement the 2013 water release.

         In implementing the 2013 water release, BOR also did not violate the Central Valley Project Improvement Act or California water law (and correspondingly the Reclamation Act of 1902, which requires agencies to comply with state water law), as alleged by Cross-Appellants San Luis & Delta-Mendota Water Authority and Westlands Water District. Finally, Cross-Appellants lack standing to pursue their Endangered Species Act claim.

         BACKGROUND

         I.

         The Trinity River begins in the Trinity Alps of Northern California. The river runs south and then wends its way northwest, picking up tributaries along the way. It eventually flows into the Klamath River at the town of Weitchpec. The water then flows forty additional miles down the lower Klamath before entering the Pacific Ocean.

         The Trinity River was once known for its abundant populations of salmon and steelhead. Before the construction of dams on the Trinity, up to 75, 000 fall-run Chinook salmon are estimated to have migrated from the Pacific Ocean to the North Fork of the Trinity River each year. The Yurok and Hoopa Valley Indian Tribes (living along the Klamath and Trinity Rivers) have relied on the fish as their primary dietary staple. In recognition of the Tribes' rights to harvest these fish, the federal government established reservations for the Tribes in the mid-1800s that endure to this day. The Trinity River bisects the Hoopa Valley Reservation, and the lower Klamath River bisects the Yurok Reservation.

         At the same time, water management has always been a central concern for the state of California. For as long as it has been a state, California has adopted laws to manage its water resources. In the early 1920s, California began drafting a comprehensive, statewide water plan. California recognized that, while most of its water resources were located in the northern part of the state, the majority of the demand came from the state's southern regions. In addition, the population's demand for water did not align with the seasonal rainfalls and snow melt. With its statewide plan, California hoped to control salinity and flooding, while managing the storage and distribution of water. One of the primary goals of the plan was to transfer water from the Sacramento River to the San Joaquin Valley and from the San Joaquin River to the southern regions of the Central Valley, the heart of California's farmland. In 1933, the California Legislature authorized this statewide plan, known as the Central Valley Project ("CVP"). Because the state was unable to fully fund the plan, the United States took over in 1935. Construction of what would become the largest federally managed water project began in 1937. See generally San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581, 594 (9th Cir. 2014); Cent. Delta Water Agency v. United States, 306 F.3d 938, 943 (9th Cir. 2002); United States v. State Water Res. Control Bd., 227 Cal.Rptr. 161, 166 (Cal.Ct.App. 1986); Eric A. Stene, The Central Valley Project, Bureau of Reclamation (last updated Aug. 4, 2015), https://www.usbr.gov/history/cvpintro.html.

         California's statewide water plan originally included plans to divert water from the Trinity River to the Central Valley. Although these initial plans were abandoned before the CVP was authorized, Congress began re-investigating the possibility in the 1940s. During this investigation, DOI estimated that more than 1.1 million acre-feet of water flowed from the upper Trinity River basin each year.^[1] Reports suggested that only 120, 500 acre-feet of water were needed to maintain the fishery resources of the Trinity and Lewiston Rivers. These reports also suggested that the construction of dams on the Trinity would actually help the fishery resources. Congress ultimately concluded that 700, 000 acre-feet of the Trinity's annual flow was being lost to the Pacific Ocean and could be diverted to the Central Valley without harming the Trinity or lower Klamath Rivers. Accordingly, in 1955, Congress authorized the construction of the Trinity River division ("TRD"), an addition to the CVP in Northern California. Act of Aug. 12, 1955, Pub. L. No. 84-386 § 1, 69 Stat. 719, 719 (1955). The purpose of the TRD was to divert water from the Trinity River to the Sacramento River "for irrigation and other beneficial uses in the Central Valley." Id. Nevertheless, Congress designed the TRD "with a view to maintaining and improving fishery conditions, " which were an important asset to "the whole north coastal area." H.R. Rep. No. 84-602, at 4 (1955). Accordingly, in the 1955 Act, Congress specifically directed the Secretary of DOI to preserve and propagate fish and wildlife. § 2, 69 Stat. at 719.

         Under the authority granted by the 1955 Act, BOR constructed two dams along the Trinity River: the Trinity and the Lewiston. The Trinity Dam blocks water flowing from the upper Trinity River, and several other tributaries, and forms Trinity Reservoir.^[2] After passing through Trinity Dam, water flows approximately eight miles downstream before reaching Lewiston Dam, which forms Lewiston Reservoir. At Lewiston Dam, the water either continues flowing down the Trinity River, or BOR diverts it toward the Sacramento River (via the Clear Creek Tunnel) for use in the CVP. If diverted, the water passes through several additional dams before reaching the Sacramento River. Water that is not diverted at the Lewiston Dam continues to flow down the Trinity River. As it did before the dams were constructed, the water eventually passes through the Hoopa Valley Indian Reservation and into the Klamath River at the town of Weitchpec. The water then flows forty miles down the lower Klamath and through the Yurok Indian Reservation until it reaches the Pacific Ocean.

         The TRD became fully operational in 1964. For the next ten years, BOR diverted an average of 88 percent of Trinity River annual inflow to the Sacramento River basin.

         II.

         The construction and operation of the TRD had devastating effects on the Trinity River environment and fish populations. Westlands Water Dist. v. U.S. Dep't of Interior, 376 F.3d 853, 862 (9th Cir. 2004). The dams blocked significant upstream fish habitat. Id. The low flows caused the Trinity River to narrow and the banks to steepen, resulting in increasingly fast and uniform water velocities. Id. These effects destroyed resting pools and vital spawning grounds. Id. Within a decade, the TRD had significantly diminished the salmon and steelhead populations in the Trinity River. Id. at 861-62.

         A. Trinity River Basin Fish and Wildlife Task Force

         In response to the effects of the TRD, the Trinity River Basin Fish and Wildlife Task Force ("TRBFW Task Force" or "Task Force") formed in the early 1970s. The Task Force was comprised of federal, state, and local agencies. It studied the impact of the TRD and it worked to develop a plan for the long-term management of the fish population and habitat in the Trinity River basin.

         B. Secretarial Decision of 1981

         In the late 1970s and early 1980s, in recognition and support of the Task Force, the Fish and Wildlife Service ("FWS"), the Bureau of Indian Affairs, and the Water and Power Resources Service studied the effects of increased water releases from the Lewiston Dam into the Trinity River. The agencies drafted an Environmental Impact Statement ("EIS") that considered eight alternative water release schedules. The agencies agreed that the best alternative was to begin water releases from the Lewiston Dam at 287, 000 acre-feet annually, and incrementally increase this flow to 340, 000 acre-feet annually in normal years. BOR would release less water in dry years. The agencies also agreed to study and draft a report on the effect of restoration flows during the first twelve years of the revised flow releases ("Trinity River Flow Evaluation Study"). In 1981, then-Secretary of the Interior, Cecil Andrus, gave legal effect to this agreement in a Secretarial Decision.

         C. Trinity River Basin Fish and Wildlife Management Act of 1984

         In 1984, Congress passed the Trinity River Basin Fish and Wildlife Management Act ("1984 Act"). Pub. L. No. 98-541, 98 Stat. 2721 (1984). The 1984 Act directed the Secretary to "formulate and implement a fish and wildlife management program for the Trinity River Basin designed to restore the fish and wildlife populations" to pre-TRD levels. Id. § 2, 98 Stat. at 2722. The 1984 Act also officially recognized the TRBFW Task Force. Id. § 3, 98 Stat. at 2722-23.

         D. Central Valley Project Improvement Act

         In 1992, Congress enacted the Central Valley Project Improvement Act ("CVPIA"). Pub. L. No. 102-575 §§ 3401-12, 106 Stat. 4600, 4706-31 (1992). Among other things, the CVPIA sought "to protect, restore, and enhance fish, wildlife, and associated habitats in the Central Valley and Trinity River basins, " while also seeking "to achieve a reasonable balance among competing demands for ...