North Coast Rivers Alliance, et al. v. United States Department of the Interior, et al.

Filing 52

ORDER GRANTING REQUEST FOR VOLUNTARY REMAND WITHOUT VACATUR (Doc. 28) signed by Chief Judge Lawrence J. O'Neill on December 15, 2016. (Munoz, I)

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1 2 UNITED STATES DISTRICT COURT 3 FOR THE EASTERN DISTRICT OF CALIFORNIA 4 5 NORTH COAST RIVERS ALLIANCE, et al., Plaintiffs, 6 7 8 9 1:16-cv-00307-LJO-MJS ORDER GRANTING REQUEST FOR VOLUNTARY REMAND WITHOUT VACATUR (Doc. 28) v. UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Defendants, 10 WESTLANDS WATER DISTRICT, et al., 11 Intervenor-Defendants. 12 13 14 I. INTRODUCTION 15 This case concerns approval by the United States Department of the Interior and its member 16 agency, the United States Bureau of Reclamation (collectively, “Federal Defendants,” “Reclamation,” or 17 the “Bureau”), of six interim renewal contracts that authorize delivery of water from March 1, 2016, 18 through February 28, 2018, from federal reclamation facilities to certain water districts served by the 19 federal Central Valley Project (“CVP”) and provide for repayment of capital construction costs, as well 20 as operational and maintenance expenses associated with CVP facilities (“2016-18 Interim Contracts”). 21 Doc. 1 (Complaint); Doc 18-2 at ECF p. 12 & 22. The 2016-18 Interim Contracts at issue in this case 22 provide water service to Westlands Water District, Santa Clara Valley Water District, and Pajaro Valley 23 24 Water Management Agency (collectively, “Interim Contractors”). See Doc. 1 at ¶ 2. A coalition of environmental organizations led by the North Coast Rivers Alliance (collectively, “Plaintiffs”), allege, 25 1 1 among other things, that Federal Defendants issued a deficient Environmental Assessment (“EA”) and 2 associated Finding of No Significant Impact (“FONSI”)1 prior to approval of the Interim Contracts, in 3 violation of the National Environmental Policy Act (“NEPA”), 42 U.S.C. § 4321 et seq., and 4 Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701-706. Doc. 1. Before the Court for decision is Federal Defendants’ request for voluntary remand without 5 6 vacatur of the EA/FONSI. Doc. 28. Plaintiffs oppose voluntary remand and, in the alternative, request 7 vacatur of both the EA and the Interim Contracts. Doc. 44. On September 23, 2016, the Court issued an 8 Order for Supplemental Briefing, requesting further input on specific issues related to the parties’ 9 requests. Doc. 41 (“Briefing Order”). Federal Defendants and Defendant Intervenors2 , filed a joint 10 statement in response to the request for supplemental briefing, Doc. 42, and Plaintiffs followed with a 11 response. Doc. 44. On December 9, 2016, the Court requested that additional information be appended 12 to the record. Doc. 50. Federal Defendants provided a responsive filing on December 12, 2016. Doc. 51. 13 Having reviewed the parties’ filings in light of the entire record, the Court GRANTS Federal 14 Defendants’ motion for voluntary remand without vacatur of the EA/FONSI, and DECLINES to vacate, 15 set-aside or otherwise rescind the 2016-18 Interim Contracts. II. BACKGROUND 16 This case is related to an earlier case, Pacific Coast Federation of Fishermen’s Ass’ns v. U.S. 17 18 Dep’t of Interior (“PCFFA”), 1:12-cv-01303-LJO-MJS, which concerned a similar challenge to the 19 NEPA review performed in connection with eight interim contracts that covered the period of time from 20 March 1, 2012 through the end of February 2014 (“2012-2014 Interim Contracts”). See PCFFA, Doc. 21 1 NEPA requires agencies to prepare an EIS for all “major Federal actions significantly affecting the quality of the human 22 environment.” 42 U.S.C. § 4332(2)(C). NEPA’s implementing regulations provide that an agency shall prepare an EA to 23 24 25 determine whether a proposed federal action will have a significant impact and to determine whether preparation of an EIS will be necessary. 40 C.F.R. § 1508.9. An EA is a “concise public document” that “include[s] brief discussions of the need for the proposal, of alternatives as required by [42 U.S.C. § 4332(E)], [and] of the environmental impacts of the proposed action and alternatives.” 40 C.F.R. §§ 1508.9(a), (b). If the agency concludes in the EA that there is no significant effect from the proposed project, the federal agency may issue a FONSI in lieu of preparing an EIS. 40 C.F.R. § 1508.9(a)(1). 2 On June 14, 2016, the Court granted the unopposed motion to intervene filed by Westlands Water District, San Luis Water District, and Panoche Water District. Doc. 21. 2 1 47. The parties in PCFFA filed cross-motions for summary judgment that became ripe at the end of 2 January 2014. In February 2014, the Court denied the PCFFA plaintiffs’ motion for summary judgment 3 and granted the PCFFA federal defendants’ and defendant-intervenors’ cross-motions for summary 4 judgment on all remaining NEPA claims. PCFFA, Doc. 88. 5 The Ninth Circuit reversed in part, first finding that, despite the fact that the Central Valley 6 Project Improvement Act (“CVPIA”), Pub. L. No. 102-575, 106 Stat. 4700 (1992), mandates renewal of 7 long-term water service contracts, the CVPIA does not require Reclamation to enter into interim 8 contracts and therefore the “no action” alternative articulated in the EA for the 2012-2014 Interim 9 Contracts unlawfully assumed interim contract renewal. Pac. Coast Fed’n of Fishermen’s Associations 10 v. United States Dep’t of the Interior, 655 Fed. Appx. 595, at *1-2 (9th Cir. July 25, 2016) (“PCFFA 11 Appellate Ruling”). The Ninth Circuit also held that “Reclamation’s decision not to give full and 12 meaningful consideration to the alternative of a reduction in maximum interim contract water quantities 13 was an abuse of discretion, and the agency did not adequately explain why it eliminated this alternative 14 from detailed study.” Id. at *2. While acknowledging that the Reclamation Project Act mandates 15 renewal of existing contract quantities when water is beneficially used, id. (citing 43 U.S.C. § 485h-1(1) 16 & (4)), the Ninth Circuit found that Reclamation “acted unreasonably by relying on stale water needs 17 data.” Id. The Ninth Circuit affirmed this Court’s ruling regarding the geographic scope of the EA: 18 19 20 21 22 23 Plaintiffs contend that the EA’s geographic scope was improperly limited to the delivery areas and should also have considered the effects, including cumulative effects, of interim contract renewal on the California River Delta, the source of the water, and on the Delta’s fish and other wildlife. This contention lacks merit because the EA was tiered off of the [Programmatic Environmental Impact Statement], which addressed Central Valley Project-wide effects of long-term contract renewal. See 40 C.F.R. § 1508.28 (describing tiering). In light of Reclamation’s obligation to conduct a more comprehensive analysis in the PEIS, it would be impractical to require the agency to trace the incremental effects of each two-year water service contract on the Delta and all Central Valley Project waters. 24 Id. at *3. The matter was remanded to this Court with instructions to vacate the grant of summary 25 3 1 judgment in favor of defendants on plaintiffs’ claim that the EA for the 2012-14 Interim Contracts was 2 inadequate because it did not give full and meaningful consideration to the alternative of a reduction in 3 maximum water quantities. Id. Reclamation was directed to “consider such an alternative in any future 4 EA for an interim contract renewal.” Id. In particular, the Ninth Circuit indicated that “[i]n satisfying 5 this duty, Reclamation may rely upon any water needs assessment for which the data remain accurate.” 6 Id. III. DISCUSSION 7 8 9 A. Request for Voluntary Remand Federal Defendants move for voluntary remand without vacatur of the EA/FONSI for the 2016- 10 18 Interim Contracts. As a threshold matter, the Court first must determine whether voluntary remand is 11 appropriate under the circumstances. “A federal agency may request remand in order to reconsider its 12 initial action.” California Communities Against Toxics v. U.S. E.P.A., 688 F.3d 989, 992 (9th Cir. 2012). 13 The Ninth Circuit has recognized that “[g]enerally, courts only refuse voluntarily requested remand 14 when the agency’s request is frivolous or made in bad faith.” Id. (citing SKF USA Inc. v. United States, 15 254 F.3d 1022, 1029 (Fed. Cir. 2001)). 16 Courts in this Circuit generally look to the Federal Circuit’s decision in SKF USA for guidance 17 when reviewing requests for voluntary remand. See, e.g., Cal. Communities, 688 F.3d at 992; United 18 States v. Gonzales & Gonzales Bonds & Ins. Agency, Inc., No. C-09-4029 EMC, 2011 WL 3607790, at 19 *3 (N.D. Cal. Aug. 16, 2011). SKF USA describes five positions an agency may take in response to 20 judicial review of an agency action: 21 22 23 24 25 First, it may choose to defend the agency’s decision on the grounds previously articulated by the agency. Second, it may seek to defend the agency’s decision on grounds not previously articulated by the agency. Third, the agency may seek a remand to reconsider its decision because of intervening events outside of the agency’s control. Fourth, even in the absence of intervening events, the agency may request a remand, without confessing error, to reconsider its previous position. Finally, as in the present situation, the agency may request a remand because it believes that its original decision was incorrect on the merits and it wishes to change 4 1 2 3 the result. 254 F.3d at 1027-28. According to SKF USA, under the third scenario, “the agency may seek a remand because of 4 intervening events outside of the agency’s control, for example, a new legal decision or the passage of 5 new legislation.” Id. at 1028. Under such circumstances, “[a] remand is generally required if the 6 intervening event may affect the validity of the agency action.” Id. 7 In contrast, under the fourth scenario, “the agency may request a remand (without confessing 8 error) in order to reconsider its previous position. It might argue, for example, that it wished to consider 9 further the governing statute, or the procedures that were followed. It might simply state that it had 10 doubts about the correctness of its decision or that decision’s relationship to the agency’s other policies.” 11 Id. at 1029. In such a case, “the reviewing court has discretion over whether to remand.” Id. “A remand 12 may be refused if the agency’s request is frivolous or in bad faith.” Id. One way an agency may 13 demonstrate good faith is by admitting that the reasoning adopted in its original action was flawed. See 14 Cal. Communities, 688 F.3d at 992 (approving voluntary remand where the agency “recognized” that its 15 original reasoning was flawed and sought to explain its decision in an alternative manner). In contrast, 16 bad faith may be demonstrated when an agency’s position does not demonstrate a commitment to a 17 changed approach. See Lutheran Church–Missouri Synod v. FCC, 141 F.3d 344, 348-49 (D.C. Cir. 18 1998) (finding bad faith where the agency sought remand based on a new “policy statement” that was 19 nonbinding, where the agency could not promise any particular decision on remand, and where the court 20 determined that the agency was merely employing “novel” tactics to avoid judicial review); Corus Staal 21 BV v. United States, 387 F. Supp. 2d 1291, 1296 (Ct. Int’l Trade 2005) (denying a remand request 22 because the requesting party expressed no doubts about the correctness of its decision). 23 Citing the PCFFA Appellate Ruling as an “intervening event,” Federal Defendants maintain that 24 their request for voluntary remand is governed by the third scenario, in which voluntary remand is 25 effectively mandatory rather than the fourth scenario, in which the Court’s discretion is guided by a 5 1 good faith inquiry. Doc. 42 at 3. Federal Defendants cite National Fuel Gas Supply Corp. v. FERC, 899 2 F.2d 1244 (D.C. Cir. 1990), in support of their position that the present situation falls within the third 3 SKF USA category. In National Fuel, the D.C. Circuit granted the Federal Energy Regulatory 4 Commission’s (“FERC”) request for voluntary remand of ratemaking order after an intervening judicial 5 decision “dramatically—and, no doubt, unexpectedly—altered” the legal backdrop against which FERC 6 issued its original order. Id. at 1249-50. Specifically, shortly before oral argument on the appeal, a 7 different panel of the D.C. Circuit issued a ruling that appeared to deprive a prior FERC order of the 8 “legal effect that [was] sought by [FERC] in National Fuel.” Id. at 1249. This, the D.C. Circuit held, 9 was an “intervening change in the law.” Id.; see also id. at 1249-50 (“Remand under these circumstances 10 also comports with the general principle that an agency should be afforded the first word on how an 11 intervening change in law affects an agency decision pending review.”). 12 Plaintiffs counter that the present case is distinguishable from National Fuel, pointing to 13 American Forest Resource Council v. Ashe, 946 F. Supp. 2d 1 (D.D.C. 2013), in which the defendant 14 agency argued that “an intervening change in the case law” mandated remand to the agency. Id. at 42 n. 15 5. The agency decision at issue in American Forest was supported by reasoning generated largely in 16 1996. See id. at 20. In requesting voluntary remand, the agency asserted that its 1996 explanation was 17 “consistent with [then-]existing case law,” but acknowledged that, since 1996, judicial decisions 18 imposed a higher burden on the agency to justify the type of decision in question. Id. at 41. The agency 19 admitted that it did not meet this heightened burden in 1996 and asked for an opportunity to do so as part 20 of the voluntary remand. Id. at 41-2. The district court concluded that the “so-called ‘change’ in the law 21 identified by [the agency] is not one that automatically requires remand,” reasoning that, prior to the 22 judicial decisions cited by the agency, the agency’s own policies drew similar conclusion, i.e. the 23 “cases’ gloss” on those issues was not novel. Id. at 42 n. 5. Therefore, because the agency “could have 24 taken the position it now takes before the so-called change in the law, the Court treat[ed] the remand 25 request as one based on the agency’s recognition of its own error, influenced as it were by several 6 1 judicial decisions.” Id. 2 Plaintiffs suggest that the present case is like American Forest because the Ninth Circuit’s ruling 3 in PCFFA “relied upon existing NEPA jurisprudence and cannons of statutory interpretation to set aside 4 defendants’ unlawful actions.” Doc. 44 at 2. Plaintiffs argue that because PCFFA “obviously did not 5 amend NEPA” it was “in no sense an ‘intervening change in the law.’” Id. 6 This takes the logic of American Forest too far. Federal Defendants issued the EA in dispute in 7 this case on February 29, 2016, approximately two years after this Court upheld a similar EA against 8 challenge in PCFFA by an order issued February 6, 2014. PCFFA, Doc. 88. Therefore, at the time the 9 EA issued, at least one Court (this one) found the government’s actions to be consistent with NEPA. As 10 previously discussed, that February 6, 2014 order was vacated in part by the Ninth Circuit, but not until 11 March 28, 2016, after the EA in this case issued. PCFFA, Doc. 97. This procedural history makes this 12 case distinguishable from American Forests. Therefore, the Court believes it would be appropriate to 13 apply SKF USA’s “intervening change in the law” scenario to justify voluntary remand without a good 14 faith inquiry. 15 But, even if SKF USA’s fourth scenario applies, requiring a showing of good faith, Federal 16 Defendants have made such a showing in their supplemental briefing. In their original motions papers, 17 Federal Defendants indicated: In the present case, without any admission that an updated water needs assessment or new EA is required, Defendants have determined that performing an updated water needs assessment, and then making that assessment part of a new EA, will be a more efficient way to resolve this lawsuit without wasting judicial or agency resources on litigation. The remand would include an updated water needs assessment and a new EA based on the updated assessment and evaluation of a no-action alternative consistent with the Ninth Circuit’s amended decision [in PCFFA]. Reclamation anticipates that this process may take approximately 12 months, but potentially longer in light of the complexity of the issues and the other time-sensitive environmental reviews currently scheduled in the next 6-12 months. 18 19 20 21 22 23 24 Doc. 28 at 4. 25 7 The Court did not find this showing compelling, explaining that “Federal Defendants refuse to 1 2 admit that a new EA is required, but nonetheless propose to prepare one that includes a no-action 3 alternative consistent with the Ninth Circuit’s amended decision” to “resolve this litigation” and avoid 4 the waste of judicial resources. Briefing Order at 5. The Court found this insufficient to demonstrate 5 good faith. Id. In particular, the Court was “concerned with Federal Defendants’ refusal to acknowledge 6 that there are parallels between the EA in this case and the EA in PCFFA,” id., and the absence of 7 authority suggesting that judicial or party efficiency alone is sufficient to demonstrate good faith, see id. 8 at 4. 9 10 11 12 13 14 15 16 17 18 19 Federal Defendants returned with a clarified position: Defendants’ motion for voluntary remand is based on the intervening PCFFA decision, which calls into question the validity of the EA in this case. . . . *** Defendants expressly “acknowledge that there are parallels between the EA in this case and the EA in PCFFA” that the Ninth Circuit later found to be inadequate, [Doc. 41 at 5]. Specifically, Defendants acknowledge that the EA in this case considered a no action alternative that “assumed [continued] interim contract renewal,” as the EA did in PCFFA, [655 Fed. Appx. 595], at * 1. See [Doc. 41 at] 2. That analysis cannot stand under the intervening PCFFA decision. The EA in this case also “eliminated th[e] [reduced-quantity] alternative from detailed study” on the same grounds cited in the EA in PCFFA, and in doing so, the EA relied on the same 2006 water needs assessment that was “prepared with data from 1999 that predated a land retirement project,” see id. at *2. This reasoning is also insufficient according to PCFFA. Further, Defendants recognize that the treatment of the no-action and reduced-quantity alternatives in the PCFFA EA were the two bases for the Ninth Circuit’s partial reversal of the judgment for Defendants. Id. at *3. 20 21 22 Although Defendants do not believe that they acted arbitrarily and capriciously in their preparation of the EA, given the state of the law at the time, Defendants acknowledge that these two aspects of the alternatives analysis in the EA would not pass muster under the reasoning of PCFFA, if that reasoning were applied in this case on the merits. 23 Doc. 42 at 4-5 (footnotes omitted). In addition, as set forth in the Declaration of Michael P. Jackson 24 (“Jackson Decl.”), the Area Manager for Reclamation’s South-Central California Area Office, 25 8 1 Reclamation has a defined plan of action for the remand, namely to (1) conduct a new water needs 2 assessment; (2) prepare and evaluate a no-action alternative premised on non-renewal of the Interim 3 Renewal Contracts for 2016-18; and (3) consider a reduced quantity alternative. Jackson Decl., Doc. 41- 4 2, ¶ 8. Plaintiffs continue to take issue with Reclamation’s refusal to admit that it acted arbitrarily and 5 6 capriciously. But, as discussed in the Briefing Order, there is no requirement that Reclamation admit 7 wrongdoing. Briefing Order at 3-4 (citing SKF USA for the proposition that an “agency may request a 8 remand (without confessing error) in order to reconsider its previous position,” 254 F.3d at 1029 9 (emphasis added)). Rather, like in California Communities, 688 F.3d at 992, where the agency was 10 found to have demonstrated a good faith basis for voluntary remand where it recognized the need for 11 additional analysis, Federal Defendants now have acknowledged that certain aspects of the EA cannot 3 12 “pass muster” under PCFFA. This is sufficient to warrant voluntary remand. 13 B. Vacatur. 14 Having concluded that voluntary remand is appropriate, the Court next turns to Federal 15 Defendants’ request for remand without vacatur, and Plaintiffs’ parallel request to vacate both the EA 16 and the Interim Contracts. In deciding whether to vacate an agency action, courts faced with a motion for voluntary remand 17 18 19 20 21 22 23 24 25 3 As mentioned, in the PCFFA Appellate Ruling, the Ninth Circuit addressed the PCFFA plaintiffs’ argument that the geographic scope of the PCFFA EA was “improperly limited to the delivery areas and should also have considered the effects, including cumulative effects of interim contract renewal on the California River Delta, the source of the water, and on the Delta’s fish and other wildlife.” 655 Fed. Appx. 595 at *3. The Ninth Circuit held “this contention lack[ed] merit becaus e the EA was tiered off of [a programmatic EIS (“PEIS”)], which addressed [CVP]-wide effects of long-term contract renewal” and because “of Reclamation’s obligation to conduct a more comprehensive analysis in the PEIS, it would be impractical to require the agency to trace the incremental effects of each two -year water service contract on the Delta and all [CVP] waters.” Id. Here, Defendant Intervenors suggest that Plaintiffs have alleged only harms that are “beyond the scope of the NEPA review required by the [Interim Contracts],” and argue that “the Ninth Circuit expressly rejected the claim that the EA should have considered the [Interim Contracts’] effects on these alleged harms.” Doc. 42 at 12. Pointing to allegations in the Complaint that at least arguably allege harms occurring within the Interim Contractors’ service areas, Plaintiffs argue that Reclamation has “studiously avoid[ed] taking any position on that question, raising the possibility that Reclamation’s future EA will be functionally identical to the EA that the Ninth Circuit held inadequate.” Doc. 44 at 5. The Court does not believe Federal Defendants’ silence on this issue demonstrates “recalcitrance” or otherwise undermines their good faith basis for voluntary remand. Federal Defendants have taken no position in this litigation that even remotely suggests they would be unwilling or unable to take into consideration evidence of environmental harm within the relevant service area(s). 9 1 have employed “the same equitable analysis” used to decide whether to vacate agency action after a 2 “rul[ing] on the merits.” Nat. Res. Def. Council, Inc. v. U.S. Dep’t of Interior, 275 F. Supp. 2d 1136, 3 1143 (C.D. Cal. 2002); ASSE Int’l, Inc. v. Kerry, ___ F. Supp. 3d ___, 2016 WL 1692806 (C.D. Cal. 4 2016); Ctr. For Native Ecosystems v. Salazar, 795 F. Supp. 2d 1236, 1241-42 (D. Colo. 2011) 5 (indicating that because “[v]acatur is an equitable remedy ... and the decision whether to grant vacatur is 6 entrusted to the district court’s discretion. . . .vacation of an agency action without an express 7 determination on the merits is well within the bounds of traditional equity jurisdiction. ”). Courts 8 routinely evaluate two factors originally articulated in Allied-Signal, Inc. v. U.S. Nuclear Regulatory 9 Commission, 988 F. 2d 146, 150-51 (D.C. Cir. 1993), often referenced as the “Allied-Signal” factors: 10 (1) “the seriousness of an agency’s errors” and (2) “the disruptive consequences that would result from 11 vacatur.” Klamath-Siskiyou Wildlands Ctr. v. NOAA Nat’l Marine Fisheries Serv., 109 F. Supp. 3d 12 1238, 1242 (N.D. Cal. 2015) (citing California Communities, 688 F.3d at 992 (quoting Allied–Signal, 13 988 F.2d at 150-51)). “Put differently, courts may decline to vacate agency decisions when vacatur 14 would cause serious and irremediable harms that significantly outweigh the magnitude of the agency’s 4 15 error.” Id. (internal quotation marks removed). 5 16 1. Scope of the Complaint and Vacatur Request 17 Before evaluating the prospects of vacatur, it is helpful to outline the scope of the Complaint in 18 this case and the forms of vacatur requested. The Complaint alleges two causes of action. The First 19 20 21 22 4 Some cases suggest other factors may be considered. See, e.g., Nat. Res. Def. Council v. Norton, No. 1:05CV01207 OWW LJO, 2007 WL 14283, at *13 (E.D. Cal. Jan. 3, 2007). But, more recently, the Ninth Circuit appears to have recognized the two Allied-Signal factors as controlling. See Cal. Communities, 688 F.3d at 992; see also Sierra Forest Legacy v. Sherman, 951 F. Supp. 2d 1100, 1106 (E.D. Cal. 2013) (interpreting Cal. Communities as holding the Allied-Signal factors are “controlling, for purposes of assessing vacatur”). 5 As the Court noted in its Briefing Order, there is some authority to support application of a more onerous standard to a 23 request for vacatur that would have the same operative effect as an injunction. See First Briefing Order at 6 n. 1 (citing Beverly Hills Unified Sch. Dist. v. Fed. Transit Admin., No. CV 12-9861-GW(SSX), 2016 WL 4445770, at *5-6 (C.D. Cal. 24 Aug. 12, 2016)). The Court declines to rule out the applicability of such a standard. However, because the Court finds that 25 Plaintiffs’ request to vacate the Interim Contracts should be denied under the less onerous Allied-Signal test, there is no need to evaluate that same request under the arguably more onerous traditional injunctive relief standard. 10 1 Claim for Relief alleges that the EA and associated FONSI for the 2016-18 Interim Contracts are 2 inadequate for a number of reasons, two of which are particularly relevant to the present analysis. First, 3 Plaintiffs allege the EA and FONSI relied on the false premise that Reclamation had no discretion to 4 reject the 2016-18 Interim Contracts and therefore defined the no action alternative as essentially the 5 same as the Proposed Action (approval of the Interim Contracts), rendering any comparative analysis 6 meaningless. Doc. 1 at ¶ 42 (a) & (c). In addition, Plaintiffs allege the EA failed to consider seriously 7 any alternatives proposing reduced quantities of water deliveries, based in part on Reclamation’s 8 assertion that it lacked discretion to reduce contract quantities when water is beneficially used. See id. at 9 ¶ 42(c). Plaintiffs relatedly allege that the water needs assessments Reclamation used to determine 10 whether water was beneficially used were outdated. Id. at ¶ 41. 11 Plaintiffs’ Second Claim for Relief alleges that approval of each of the 2016-18 Interim 12 Contracts is a “major federal action that may significantly affect the quality of the human environment, ” 13 and therefore Reclamation acted unlawfully by preparing an EA instead of a more involved 14 Environmental Impact Statement (“EIS”). Id. at ¶¶ 45-47. 15 16 Plaintiffs’ prayer for relief requests the following: 1. A declaration that Defendants acted contrary to law by issuing a FONSI for the 2016-18 17 Interim contract renewals based on an EA that is legally and factually inadequate; 18 2. An injunction ordering Defendants to withdraw the FONSI and to prepare an adequate 19 EA as required by NEPA; 20 3. An injunction ordering Reclamation to prepare an EIS; 21 4. An award of costs and reasonable attorneys fees and expenses; and 22 5. “Any other relief that this Court deems just and proper.” 23 Doc. 1 at 17-18. 24 It is plain from the face of the Complaint that Plaintiffs have requested vacatur of the EA and 25 FONSI. It is therefore appropriate to consider Defendants’ request for remand without vacatur of the 11 1 EA/FONSI together with Plaintiffs’ arguments in favor of vacating the EA/FONSI under the Allied- 2 Signal test outlined above. Plaintiffs also make plain in their briefs that they seek to set aside the 2016-18 Interim Contracts 3 4 as well. As a general matter, where an agency acts arbitrarily and/or capriciously or not in accordance 5 with the law, the APA requires a reviewing court to set aside the agency action. 5 U.S.C. § 706(2)(A)- 6 (D). In the present case, the challenged agency action is the issuance of the EA/FONSI. Nevertheless, if 7 an agency has acted unlawfully in executing a contract, the court retains the discretion to apply the 8 remedy of contract rescission to associated contracts, Natural Resources Defense Council v. Houston, 9 146 F.3d 1118, 1129 (9th Cir. 1998), or preserve the associated contract, if the legal flaw can be 10 rectified in some another way. Id. (citing Weinberger v. Romero-Barcelo, 456 U.S. 305, 320 (1982)); 11 Conner v. Burford, 848 F.2d 1441, 1460-61 & n. 50 (9th Cir. 1988) (modifying district court order to 12 clarify that oil leases executed without full NEPA and Endangered Species Act (“ESA”) compliance 13 need not be set aside, while enjoining any “surface-disturbing” activities on the leased properties until 14 full compliance is achieved, thereby “avoid[ing] the unnecessarily harsh result of completely divesting 15 the lessees of their property rights”); see also Tinoqui–Chalola Council of Kitanemuk & Yowlumne 16 Tejon Indians v. U.S. Dep’t of Energy, 232 F.3d 1300, 1305 (9th Cir. 2000) (court has authority under 17 the APA to order rescission of a contract for sale if the federal agency “acted in excess of statutory 18 authority or without observance of the procedures required by law”); Port of Astoria v. Hodel, 595 F.2d 19 467, 479 (9th Cir. 1979) (court may declare contract unenforceable pending preparation of required 20 environmental review). As a threshold matter, Federal Defendants argue that Plaintiffs did not pray for the remedy of 21 6 22 contract rescission and should not be permitted to use Defendants’ motion for voluntary remand as a 23 24 25 6 The parties variously refer to this request as a request for “contract set -aside” and “contract vacatur.” See, e.g., Doc. 42 at 8; Doc. 44 at 8. Regardless of label, for purposes of this case, it is a request for injunctive relief against contract implementation/performance. 12 1 basis for expanding the scope of this lawsuit. Doc. 42 at 8. 7 In their first supplemental brief, Plaintiffs 2 argue the Complaint’s generic request for “[a]ny other relief this Court deems just and proper” is 3 sufficient to permit contract set-aside as a remedy. Doc. 44 at 8. In support of this assertion, Plaintiffs 4 cite Rental Development Corporation of America v. Lavery, 304 F.2d 839 (9th Cir. 1962), in which 5 lessees sued lessors for breach of a lease, but did not request cancellation of the lease in their complaint. 6 The Ninth Circuit nevertheless determined that ordering lease cancellation was appropriate because the 7 complaint included “the usual prayer for ‘such other relief as to the Court may seem just and proper.’” 8 Id. at 840-41. Other supporting authority exists, including United States v. Martin, 651 F.2d 24, 30-31 9 (1st Cir. 1981), in which the First Circuit permitted an award of damages after trial despite the fact that 10 the complaint did not contain an explicit prayer for damages, reasoning that the relief was justified under 11 Fed. R. Civ. P. 54(c), which provides that “every final judgment shall grant the relief to which the party 12 in whose favor it is entered is entitled, even if the party has not demanded such relief in his pleadings. ” 13 Defendant Intervenors cite a more recent Fifth Circuit case, Dillard v. Merrill Lynch, Pierce, Fenner & 14 Smith, Inc., 961 F.2d 1148, 1155 (5th Cir. 1992), which affirmed a district court’s refusal to consider a 15 request for declaratory and injunctive relief because the plaintiff did not request such relief in his 16 pleadings. Likewise, Conkey v. Reno, 885 F. Supp. 1389, 1392 (D. Nev. 1995), dismissed a claim for 17 declaratory relief because the complaint failed to indicate “what in particular [the plaintiff] wish[ed] to 18 have the Court declare,” reasoning that “[t]he failure to indicate what in particular plaintiffs seek by way 19 of a declaratory judgment is in itself a failure to state a claim.” Both Dillard and Conkey cited Fed. R. 20 Civ. P. 8(a)(3), which requires any pleading to contain “a demand for the relief sought, which may 21 include relief in the alternative or different types of relief. ” It is not necessary to and the Court does not 22 resolve these conflicting authorities here because, as explained below, even if the Complaint’s generic 23 prayer sufficiently pleads a prayer for contract rescission for notice purposes, the Court finds it is 24 25 7 The Court agrees with Plaintiffs that the representations made by the PCFFA plaintiffs in that case that they were “not ask[ing] the Court to enjoin or otherwise disturb . . . the Bureau’s entry into the interim contracts,” see PCFFA Doc. 26 at 2, does not bind the Plaintiffs in the present action. 13 1 inappropriate to rescind, vacate, or otherwise block performance of the 2016-18 Interim Contracts, at 2 least not on the present record.8 3 Although the Court will assume, for purposes of the remaining discussion, that the Complaint 4 sufficiently pleads a prayer for contract rescission, such a prayer does not fit neatly into an analytical 5 framework in the context of the present motion. The Complaint challenges only the preparation and 6 adoption of the EA/FONSI, not the execution of the Interim Contracts. At best, contract rescission may 7 be an appropriate remedy upon a finding that the EA/FONSI were prepared in an unlawful manner. 8 Therefore, in evaluating Federal Defendants’ request for remand without vacatur of the EA/FONSI, the 9 Court applies the Allied-Signal factors only to the question of whether the EA/FONSI should be vacated. 10 Nevertheless, as a practical matter, for the reasons discussed below, the impact of Interim Contract 11 vacatur is incorporated by reference into the discussion of the second Allied-Signal factor. 12 2. Seriousness of the Agency’s Errors 13 The first Allied-Signal factor is the seriousness of the agency’s errors. California Communities, 14 688 F.3d at 992 (citing Allied-Signal, 988 F.2d at 150-51). One way to measure the seriousness of an 15 agency’s errors is to attempt to evaluate the likelihood that the agency will be able to justify future 16 decisions that would follow the status quo. See Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 17 1048-49 (D.C. Cir. 2002) (cited with approval in Klamath-Siskiyou, 109 F. Supp. 3d at 1243). In this 18 case, a “status quo” decision by Federal Defendants would involve approval of an revised EA/FONSI 19 (as opposed to preparation of an EIS) evaluating the 2016-18 Interim Contracts. 20 Defendant Intervenors argue that any errors in the current EA are redeemable on remand because 21 “Defendants have a plan for remand that will fully address the issues raised by the Ninth Circuit’s ruling 22 in PCFFA.” Doc. 42 at 11. Federal Defendants indicate that they plan to conduct a new water needs 23 assessment. Jackson Decl. at ¶ 8. If the water needs assessment shows that less than the full contract 24 25 8 Moreover, even if the current Complaint does not properly request vacatur of the 2016-18 Interim Contracts, no party has addressed whether Plaintiffs would be entitled at this early stage of the case to amend their pleading to include such a pray er. 14 1 amount is beneficially used, Reclamation will define a reduced-quantity alternative based upon the water 2 needs assessment and analyze that alternative in detail. Id. at ¶ 9. If the water needs assessment shows 3 that the full contract amount is beneficially used, Reclamation will eliminate the reduced quantity 4 alternative from detailed study based upon the water needs assessment. Id. It is difficult to imagine what 5 else Federal Defendants could do to address the Ninth Circuit’s concern in PCFFA that any reduced 6 quantity alternative evaluated in an EA covering the Interim Contracts should take into consideration up- 7 to-date and accurate water needs information. As to this issue, the Court “cannot say it is unlikely [the 8 agency] will be able to justify a future decision” to issue an EA/FONSI regarding and approve continued 9 implementation of the 2016-18 Interim Contracts or a modified set of similar Interim Contracts based 10 upon updated water needs assessments. 11 Potentially more problematic is Federal Defendants’ admission that any new EA will need to 12 consider a no-action alternative based upon non-renewal of the Interim Contracts. Jackson Decl. at ¶ 8. 13 In the PCFFA Appellate Ruling, the Ninth Circuit explained that the PCFFA EA’s “no action” 14 alternative was unlawful because it assumed continued interim contract renewal. 655 Fed. Appx. 595 at 15 *1-2. The Ninth Circuit acknowledged that “[w]hen agency action is mandatory, the ‘no action’ 16 alternative is properly defined as the carrying out of that action,” but refused to find renewal of the 17 interim contracts was mandatory or that the contracts themselves mandated renewal. Id. at *2. As a 18 general rule, a “no action” alternative is “meaningless” if it assumes the existence of the very plan being 19 proposed. Id. (citing Friends of Yosemite Valley v. Kempthorne, 520 F.3d 1024, 1038 (9th Cir. 2008)). 20 The no-action alternative is used to create a baseline against which the impacts of a project are 21 measured. See Ctr. for Biological Diversity v. U.S. Dept. of Interior, 623 F.3d 633, 642 (9th Cir. 2010); 22 40 C.F.R. § 1502.14 (describing alternatives analysis applicable to EISs); Native Ecosystems Council v. 23 U.S. Forest Serv., 428 F.3d 1233, 1245 (9th Cir. 2005) (explaining that the alternatives provision of 24 NEPA applies whether an agency is preparing an EIS or an EA). Because the purpose of an EA is at 25 least in part to help the action agency determine whether an EIS is required, 40 C.F.R. § 1508.9, a 15 1 “meaningless” alternatives analysis in an EA calls into question the validity of the agency’s 2 determination that issuance of an EA/FONSI, rather than an EIS, is appropriate. 3 As to this issue, it is difficult for the Court to determine whether the agency “will be able to 4 justify a future decision” to issue an EA versus prepare an EIS. Because the scope of the impacts to be 5 considered is limited to impacts within the delivery area, PCFFA Appellate Ruling, 655 Fed. Appx. 595 6 at *3, it is possible the impacts revealed by a comparison of the proposed Interim Contracts to a proper 7 “baseline” no-action alternative would still warrant the re-issuance of an EA/FONSI. But, the present 8 record reveals no information upon which Court can evaluate the likelihood that impacts will be found 9 to be insignificant on remand. Given that this is Federal Defendants’ motion to remand without vacatur, 10 this factor weighs slightly in favor of vacatur of the EA/FONSI. 11 3. Consequences of Vacatur 12 The Court next turns to the second Allied-Signal factor: the disruptive consequences that would 13 result from vacatur. California Communities, 688 F.3d at 992 (citing Allied-Signal, 988 F.2d at 150-51). 14 Federal Defendants do not assert that vacating the EA/FONSI would have any independent disruptive 15 consequences. Rather, they asserted in the first round of supplemental briefing that “[i]t would be 16 difficult to vacate the EA without causing at least some of the harms that would follow from vacating 17 the contracts.” Doc. 42 at 7. In other words, Federal Defendants incorporate by reference arguments and 18 evidence about the disruptive consequences of setting aside the Interim Contracts into their argument 19 against vacatur of the EA/FONSI. For purposes of organizational clarity and efficiency, the Court first 20 addresses these arguments regarding the disruptive consequences of Interim Contract rescission. The 21 Court then addresses whether Federal Defendants adequately have connected EA/FONSI vacatur to 22 Interim Contract rescission. 23 24 a. Disruptive Consequences of Interim Contract Vacatur Defendants point to several potential consequences of vacating the 2016-18 Interim Contracts. 25 Michael Shires, an economist and public policy analyst retained by Defendant Intervenors, researched 16 1 how the operations of Westlands Water District (“Westlands”) impact the economy of its immediate 2 region, the state, and the nation. Declaration of Michael A. Shires (“Shires Decl.”), Doc. 42-3 at ¶ 2-3. 3 Shires states that reductions in Westland’s CVP water supply have resulted in: (1) more expensive 4 groundwater being used to attempt to cover some of the shortfall in available water; (2) farmers within 5 Westlands taking land out of production and/or curtailing harvesting of some planted crops; and 6 (3) farmers within Westlands changing the mix of crops grown. Id. at ¶ 5. With regard to reduced 7 acreage in production, Shires concludes that reduced water availability has caused an 18 percent decline 8 in available jobs and overall output, for an estimated loss of 5,200 jobs and nearly $650 million dollars 9 of overall economic output. Id. at ¶ 6. Shires concludes that if CVP water deliveries cease altogether, 10 these negative consequences would be “all the more damaging and even potentially devastating given 11 that the already prolonged unavailability of sufficient water deliveries would be extended even further. 12 Such further extension of the unavailability of sufficient water [deliveries] would be expected to result 13 in an accumulation and multiplication of negative consequences, for example, processing plan and 14 supply chain closures and other business failures. ” Id. at ¶ 8. 15 According to Jose Gutierrrez, Westlands’ Deputy General Manager of Resources, failure to 16 receive water allocations has had a “significant negative impact on the local and regional economies.” 17 Declaration of Jose Gutierrez (“Gutierrez Decl.”), Doc. 42-2, at ¶ 28. Overall, the “weather-related and 18 regulatory-drought” has resulted in the fallowing of hundreds of thousands of acres of land in the 19 Central Valley, the loss of more than 15,000 jobs, and more than $2 billion in lost revenue to the state’s 20 farming industry. Id. at ¶ 30. Gutierrez also explains that the area within Westlands’ service area has 21 suffered from land subsidence, a consequence of long-term groundwater overdraft. Id. at ¶¶ 33-34. 22 Groundwater pumping generally decreases in years when CVP Contract water deliveries decrease. Id. at 23 ¶ 37. Water supply constraints are also expected to lead to significant land fallowing, which can 24 negatively impact air quality. Id. at ¶ 38. 25 Plaintiffs point out, correctly, that all of the harms listed above are harms that have occurred or 17 1 are occurring as the result of the drought with the Interim Contracts in place. Plaintiffs argue that “the 2 very fact that these harms occur now, with the contracts in place, shows that vacatur is not the cause of 3 the harm.” Doc. 44 at 12-13. It is true that Defendants have not provided any quantitative (or even rough 4 qualitative) estimate of the relative impact of Interim Contract vacatur vis-à-vis the background 5 conditions. However, Defendants have presented evidence that tends to suggest existing economic and 6 environmental harms would be exacerbated if the Interim Contracts are vacated. For example, Shires 7 extrapolates from existing harms caused by the ongoing drought and regulatory restrictions to conclude 8 that vacatur of the Interim Contracts would cause additional harm. Shires Decl., Doc. 42-3, at ¶ 8 The 9 fact that the harms would be present to some degree without vacatur simply goes to the weight this harm 10 is to be given in the equitable balance. 11 This case is unlike Public Employees for Environmental Responsibility v. United States Fish & 12 Wildlife Serv., No. CV 14-1807 (JDB), 2016 WL 3030228, at *1-2 (D.D.C. May 25, 2016) (“PEER”), in 13 which the district court disregarded the agency’s showing that vacatur of agency orders for 14 noncompliance with NEPA would cause economic disruption. The PEER court found the agency had 15 not made a compelling case because the forecasted harms were “imprecise or speculative.” Id. at *2. 16 Specifically, the agency claimed that “[f]isheries impacts can be in the millions of dollars” and that “the 17 impacts to the aquaculture could be in the millions of dollars.” Id. The Court found these to be “entirely 18 conjectural” and, critically, disputed by contrary evidence presented by the environmental plaintiffs. 19 Here, while Defendants’ showing is imprecise, it is not completely conjectural. It is not fantasy, for 20 example, to extrapolate from documented harms that have resulted from low water deliveries in order to 21 advance the proposition that greater harm would result from no water deliveries. 22 Moreover, unlike in PEER, in response to Federal Defendants’ and Defendant Intervenors’ 23 imperfect, but nonetheless pertinent, factual showing, Plaintiffs present no evidence in the context of 24 these motions regarding the consequences of not vacating the Interim Contracts. Plaintiffs argue that 25 “the environmental harm from remanding without vacatur is profound,” Doc. 44 at 13, but cite only to 18 1 general holdings from prior cases as well as the allegations in their own complaint. For example, 2 Plaintiffs quote a footnote from the Introduction to this Court’s summary judgment ruling in PCFFA, in 3 which the Court notes it “is indisputable that delivery of CVP water to contractors impacts the 4 environment in significant ways.” PCFFA, Doc. 88 at 6 n. 3 (emphasis in original). In that sentence, the 5 Court was explaining why “operational decisions . . . rather than the Interim Contracts themselves, 6 actually control deliveries” to water contractors. Id. at 5. That generic statement cannot be used as 7 evidence of harm for purposes of the present equitable analysis, particularly given the extremely generic 8 nature of the statement, as compared to the very specific scope of environmental harms relevant to the 9 NEPA analysis under review in the present case, which, according to the Ninth Circuit, is properly 10 “limited to the delivery areas.” PCFFA Appellate Ruling, 655 Fed. Appx. 595 at *3. The Complaint 11 certainly alleges “the worsening contamination of ground and surface water resources in the Central 12 Valley resulting from the harmful irrigation practices th[e] [Interim Contracts] perpetuate” and suggests 13 impacts to the California least tern and giant garter snake, Doc. 2 at ¶¶ 4, 28, all of which plausibly may 14 include impacts within the Interim Contractors’ delivery areas. Yet, again, these allegations are not 15 evidence. See F.D.I.C. v. Deglau, 207 F.3d 153, 172 (3d Cir. 2000) (refusing to consider allegations in 16 complaint in evaluating propriety of injunctive relief). Despite several rounds of supplemental briefing, 17 Plaintiffs have not submitted any evidence in support of their claimed harms. 18 Particularly in light of the limited geographic scope of the harms that are to be considered in the 19 NEPA review at issue, the Court concludes that the disruptive consequences of rescinding the 2016-18 20 Interim Contracts outstrip the consequences that would flow from leaving the Interim Contracts in place. 21 22 b. Impact of EA/FONSI Vacatur on Interim Contract Implementation Federal Defendants argue that the above conclusion—that rescinding the 2016-18 Interim 23 Contracts would be more disruptive than not doing so—should control the Court’s evaluation of whether 24 the EA/FONSI should be vacated. In support of this argument, Federal Defendants rely in large part on 25 40 C.F.R. §§ 1505.2 and 1506.1 to support the proposition that setting aside the EA/FONSI would have 19 1 the same practical effect as setting aside the Interim Contracts. Doc. 46 at 2. Whenever an agency 2 determines it must prepare an EIS, 40 C.F.R. § 1505.2 requires the agency to “prepare a concise public 3 record of decision” (“ROD”) and sets forth the required content of any such ROD. 40 C.F.R. § 4 1506.1(a), in turn provides: Until an agency issues a record of decision as provided in § 1505.2 (except as provided in paragraph (c) of this section), no action concerning the proposal shall be taken which would: 5 6 7 (1) Have an adverse environmental impact; or 8 (2) Limit the choice of reasonable alternatives. 9 Therefore, in any case requiring the preparation of an EIS, the agency may not take any action 10 concerning the proposed project that would have an adverse environmental impact unless and until the 11 required ROD issues. In the present case, the agency determined that no EIS and ROD were required, and instead 12 13 issued the EA and FONSI. This is in accordance with 40 C.F.R. § 1501.4, which commands the agency 14 “based on the [EA] [to] make its determination whether to prepare an [EIS],” and further requires the 15 issuance of a FONSI whenever “the agency determines on the basis of the environmental assessment not 16 to prepare a statement.” The Court agrees with Federal Defendants that if the EA is vacated, the FONSI cannot stand 17 18 alone because it is “supported by” the EA. See Finding of No Significant Impact & Final Environmental 19 Assessment, Central Valley Project Interim Renewal Contract for Westlands Water District, Santa Clara 20 Valley Water District, and Pajaro Valley Water Management Agency 2016- 2018 (February 2016) 9 21 (“FONSI”), Doc. 51-1, at ECF p. 5 . With neither the EA nor the FONSI in place, water deliveries 22 23 24 25 9 The Court takes judicial notice of this public record. See Fed. R. Evid. 201(b); San Luis & Delta–Mendota Water Auth. v. Salazar, 686 F. Supp. 2d 1026, 1031 (E.D. Cal. 2009) (taking judicial notice of public records published by administrative bodies). While the court may take judicial notice of these types of documents, the documents are judicially noticeable “only for the purpose of determining what statements are contained therein, not to prove the truth of the contents or any party’s assertion of what the contents mean.” United States v. S. Cal. Edison Co., 300 F. Supp. 2d 964, 975 (E.D. Cal. 2004). 20 1 pursuant to the 2016-18 Interim Contracts during the remand period would then be subject to 40 C.F.R. 2 § 1506.1. In the absence of a ROD specific to the 2016-18 Interim Contracts, to the extent deliveries 3 under those Interim Contracts are found to have any “adverse environmental impact,” Defendants would 4 need to reduce or potentially even suspend deliveries. Doc. 46 at 2. Accordingly, because even the 5 flawed EA mentions some forms of adverse environmental impact within the Interim Contractors’ 6 delivery areas, see, e.g., EA/FONSI, Doc. 51-1 at ECF p. 48 (“[T]he resumption of agricultural activities 7 on lands fallowed for more than one year has the potential to remove dens, reduce prey and force kit 8 foxes into unfamiliar areas.”), reduction or suspension of deliveries is a real possibility as a result of 40 9 C.F.R. § 1506.1, the applicability of which does not turn on the “significance” of environmental harm. 10 The Court also notes that it has been unable to identify a single case in which a NEPA document has 11 been vacated but an ongoing project approved by that document has been permitted to continue in whole 12 or in part. 13 The Court is unpersuaded by Plaintiffs’ citation to Northern Cheyenne Tribe v. Norton, 503 F.3d 14 836 (9th Cir. 2007). In that case, the Ninth Circuit considered the propriety of a district court’s decision 15 to enjoin partially coal bed methane extraction after finding that an EIS reviewing the extraction project, 16 while “generally sufficient under NEPA, . . . improperly failed to consider” a certain alternative. Id. at 17 841. Plaintiffs in that case cited 40 C.F.R. § 1506.1(c)(3), which prohibits any agency in the process of 18 preparing a programmatic EIS from “undertak[ing] in the interim any major Federal action covered by 19 the program which may significantly affect the quality of the human environment unless such action: 20 (1) Is justified independently of the program; (2) Is itself accompanied by an adequate environmental 21 impact statement; and (3) Will not prejudice the ultimate decision on the program.” The Ninth Circuit 22 rejected the plaintiffs’ argument that this provision “requires that no development proceed until after a 23 valid EIS is completed,” instead holding that “a NEPA violation is subject to traditional standards in 24 equity for injunctive relief and does not require an automatic blanket injunction against all 25 development.” 503 F.3d at 843. Northern Cheyenne Tribe answers (in the negative) only the question of 21 1 whether a NEPA violation mandates an absolute stop to any project approved by a flawed NEPA 2 document. Because the issue was not raised, Northern Cheyenne Tribe does not address the question of 3 whether vacatur of the EIS itself would have made it impossible for the action agency to implement the 4 project in question in light of 40 C.F.R. § 1506.1. 5 The Court therefore concludes that vacatur of the EA/FONSI would likely cause the same 6 disruptive consequences as suspending implementation of the Interim Contracts. At least on the present 7 record, the consequences of Interim Contract suspension outstrip the consequences that would flow from 8 leaving the Interim Contracts in place. This must be balanced against the agency’s error. As discussed 9 above, regarding the Ninth Circuit’s concern in the PCFFA Appellate Ruling that any reduced quantity 10 alternative evaluated in an EA covering the Interim Contracts should take into consideration up-to-date 11 and accurate water needs information, the Court believes it is likely that the agency will be able to cure 12 this error on remand. As to the admitted errors regarding the no-action alternative, the use of such a 13 “meaningless” alternatives analysis calls into question the validity of the agency’s issuance of an 14 EA/FONSI, rather than an EIS. However, because the scope of the impacts to be considered is limited to 15 impacts within the delivery area, it is possible the impacts revealed by a comparison of the proposed 16 Interim Contracts to a proper “baseline” no-action alternative would still warrant the re-issuance of an 17 EA/FONSI. The present record simply does not permit a firm determination of the likelihood that the 18 agency can cure the faulty alternatives analysis defect on remand. Although this failure of proof by the 19 moving party weighs in favor of vacatur, the Court believes the actual evidence of harm that would be 20 caused by vacatur outweighs the seriousness factor. As a result, any intervention that would suspend 21 implementation of the 2016-18 Interim Contracts would be inappropriate on the present record, and, 22 relatedly, vacatur of the EA/FONSI would likewise be inappropriate because vacatur of the NEPA 23 document likely would have the same practical effect as suspension of the Interim Contracts. 24 4. Dismissal 25 Federal Defendants argue that the Court should dismiss this case upon remand because the 22 1 claims in this case are no longer ripe for review. Doc. 28 at 5. Federal Defendants cite American Wild 2 Horse Preservation Campaign v. Salazar, 115 F. Supp. 3d 1 (D.D.C. 2012), in which the district court 3 granted an agency’s request for voluntary remand of an administrative decision authorizing rounding up, 4 castrating, and returning of gelded wild horses to public land, a decision alleged to be in violation of the 5 Wild Free-Roaming Horses and Burros Act, 16 U.S.C. §§ 1331-1340. The court further concluded that 6 the claims based upon the remanded administrative decision should be dismissed because no relevant 7 agency decision remained for the Court to consider. Id. at *4. Of particular note, nothing in the case 8 suggested any disputed activities would be ongoing during the period of remand, nor could any party 9 anticipate what the agency’s decision would be at the conclusion of remand. See id. 10 The situation here is very different. The Court is permitting continued implementation of the 11 Interim Contracts despite the agency’s admission that the NEPA document covering those contracts is 12 flawed. Moreover, one of Federal Defendants’ central arguments—that vacatur of the EA/FONSI will 13 likely have the same disruptive consequences as any order prohibiting impleme ntation of the Interim 14 Contracts themselves—depends in part on the underlying assumption that implementation of the Interim 15 Contracts will cause some environmental harm. 16 “District courts have the authority to stay court proceedings and retain jurisdiction over cases 17 even when an agency’s request for a voluntary remand is granted.” XP Vehicles, Inc. v. United States 18 Dep’t of Energy, 156 F. Supp. 3d 185, 193 (D.D.C. 2016). “While this is not always done, courts have 19 exercised their discretion to do so when, for example, the court wishes to ensure that a voluntary remand 20 will not, in fact, prejudice the non-movant.” Id.; see also Greater Yellowstone Coal. v. U.S. E.P.A., No. 21 4:12-CV-60-BLW, 2013 WL 1760286, at *5 (D. Idaho Apr. 24, 2013) (after granting motion for 22 voluntary remand, retaining jurisdiction to “ensure a timely remand process and to allow the parties to 23 challenge any new [agency] decision in this case.”); Friends of Park v. Nat’l Park Serv., No. 2:13-CV24 03453-DCN, 2014 WL 6969680, at *4 (D.S.C. Dec. 9, 2014) (after granting motion for voluntary 25 23 1 remand, retaining jurisdiction to “ensure compliance” with the regulation alleged to have been violated). 2 The Court will order periodic status reports on the progress of the remand. 3 5. Fees and Costs 4 Finally, Federal Defendants’ opening brief suggested that if voluntary remand is authorized in 5 this case “each party should bear its own costs for the limited duration of this case.” In the Briefing 6 Order, the Court reasoned that Li v. Keisler, 505 F. 3d 913, 919 (9th Cir. 2007), cited by Federal 7 Defendants, did not support the position advanced. Briefing Order at 7. Rather, Li suggests a case-by- 8 case inquiry into whether substantial justification was present by, for example, examining whether the 9 government’s action was contrary to clearly established law. 505 F.3d at 920. The Court invited further 10 briefing, Briefing Order at 7, but Federal Defendants have not provided any. Therefore, the Court will 11 treat this issue as abandoned. 12 IV. CONCLUSION AND ORDER 13 For the reasons set forth above: 14 (1) Federal Defendants’ motion for voluntary remand WITHOUT VACATUR of the EA/FONSI 15 is GRANTED; 16 (2) Plaintiffs’ request to vacate, set-aside, or otherwise rescind the 2016-18 Interim Contracts is 17 DENIED on the present record; 18 (3) All proceedings in this case are STAYED until further notice; 19 (4) The Court will retain jurisdiction over this matter; and 20 (5) Federal Defendants shall submit a brief status report on the progress of remand every ninety 21 days, starting ninety days from electronic service of this order. 22 IT IS SO ORDERED. 23 Dated: /s/ Lawrence J. O’Neill _____ December 15, 2016 UNITED STATES CHIEF DISTRICT JUDGE 24 25 24

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