                                                                         FILED
                    UNITED STATES COURT OF APPEALS
                                                                          JUL 25 2016
                            FOR THE NINTH CIRCUIT                     MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS




PACIFIC COAST FEDERATION OF                    No.   14-15514
FISHERMEN’S ASSOCIATIONS; SAN
FRANCISCO CRAB BOAT OWNERS                     D.C. No.
ASSOCIATION, INC.,                             1:12-cv-01303-LJO-MJS
                                               Eastern District of California,
              Plaintiffs - Appellants,         Fresno

 v.
                                               ORDER
UNITED STATES DEPARTMENT OF
THE INTERIOR; UNITED STATES
BUREAU OF RECLAMATION,

              Defendants - Appellees,

 and

WESTLANDS WATER DISTRICT; et al.,

              Intervenor-Defendants -
Appellees.


Before: SILVERMAN, FISHER, and TALLMAN, Circuit Judges.

       The memorandum disposition filed on March 28, 2016, is replaced with the

concurrently filed amended memorandum disposition.

       With these amendments, Judges Silverman and Tallman have voted to deny

appellants’ petition for rehearing en banc, and Judge Fisher so recommends.
         The full court has been advised of the petition for rehearing en banc, and no

judge has requested a vote on whether to rehear the matter en banc, Fed. R. App.

P. 35.

         The petition for rehearing en banc (Docket Entry No. 56) is DENIED. No

further petitions for panel rehearing or rehearing en banc will be entertained.




                                            2
                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                           FILED
                            FOR THE NINTH CIRCUIT
                                                                            JUL 25 2016
                                                                        MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
PACIFIC COAST FEDERATION OF                      No. 14-15514
FISHERMEN’S ASSOCIATIONS; et al.,
                                                 D.C. No. 1:12-cv-01303-LJO-MJS
              Plaintiffs - Appellants,

 v.                                              AMENDED MEMORANDUM*

UNITED STATES DEPARTMENT OF
THE INTERIOR; et al.,

              Defendants - Appellees,

  and

WESTLANDS WATER DISTRICT; et al.,

              Intervenor-Defendants -
Appellees.


                   Appeal from the United States District Court
                       for the Eastern District of California
                   Lawrence J. O’Neill, District Judge, Presiding

                     Argued and Submitted February 9, 2016
                            San Francisco, California


        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
                     Submission Withdrawn February 9, 2016

                           Resubmitted March 28, 2016

Before: SILVERMAN, FISHER, and TALLMAN, Circuit Judges.

      Pacific Coast Federation of Fishermen’s Associations, Inc., and San

Francisco Crab Boat Owners Association, Inc. (“plaintiffs”) appeal the district

court’s partial dismissal and partial summary judgment of their action under the

National Environmental Policy Act (“NEPA”) against the United States

Department of the Interior and the United States Bureau of Reclamation. We have

jurisdiction under 28 U.S.C. § 1291. We affirm in part, reverse in part, and

remand.

      Prior to approving eight interim two-year contracts for the delivery of water

from the Central Valley Project to California water districts, Reclamation issued an

environmental assessment (“EA”) and a finding of no significant impact

(“FONSI”). Plaintiffs seek declaratory and injunctive relief on the basis of alleged

violations of NEPA in (1) an inadequate EA and FONSI and (2) failure to prepare

an environmental impact statement (“EIS”) for the interim contracts. The district

court dismissed plaintiffs’ claims that an EIS was required and that the EA’s “no

action” alternative was deficient, and it granted summary judgment in favor of

defendants on the remaining challenges to the EA.


                                          2
      Even though the two-year contracts expired on February 28, 2014, this

appeal is not moot. The short duration and serial nature of Reclamation’s interim

water contracts place plaintiffs’ claims within the mootness exception for disputes

capable of repetition yet evading review. See A.D. ex rel. L.D. v. Haw. Dep’t of

Educ., 727 F.3d 911, 914 (9th Cir. 2013).

      We review de novo a dismissal for failure to state a claim under Fed. R. Civ.

P. 12(b)(6). Chubb Custom Ins. Co. v. Space Sys./Loral, Inc., 710 F.3d 946, 956

(9th Cir. 2013). We also review de novo the district court’s ruling on summary

judgment. San Luis & Delta-Mendota Water Auth. v. Jewell, 747 F.3d 581, 601

(9th Cir. 2014), cert. denied, 134 S. Ct. 948 & 950 (2015). Claims under NEPA

are reviewed under the standards of the Administrative Procedure Act, which

provides that an agency action must be upheld unless it is “‘arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with law.’” Id. (quoting 5

U.S.C. § 706(2)(A)).

I. “No Action” Alternative

      The EA’s “no action” alternative, which assumed continued interim contract

renewal, did not comply with NEPA. A “no action” alternative may be defined as

no change from a current management direction or historical practice. 43 C.F.R.

§ 46.30. But a “no action” alternative is “meaningless” if it assumes the existence


                                          3
of the very plan being proposed. Friends of Yosemite Valley v. Kempthorne, 520

F.3d 1024, 1038 (9th Cir. 2008). Rather, the “no action alternative looks at effects

of not approving the action under consideration.” 43 C.F.R. § 46.30. Here, the

action under consideration was the renewal of the water delivery contracts. See Pit

River Tribe v. U.S. Forest Serv., 469 F.3d 768, 784 (9th Cir. 2006) (holding that

extensions of Bureau of Land Management leases permitting production of

geothermal energy did not preserve the status quo where the extensions were not

mandatory). Ass’n of Pub. Agency Customers, Inc. v. Bonneville Power Admin.,

126 F.3d 1158 (9th Cir. 1997), is not to the contrary. There, the “no action”

alternative was not defined as the status quo of continuing existing power

contracts; instead, the proposed action was a new business strategy that would

result in “profound alterations in [Bonneville Power Administration’s]

relationships with certain large industrial customers,” and the “no action”

alternative analyzed in the EIS, and upheld by this court, was continued operations

under the existing management strategy. Id. at 1163, 1168, 1188.

      When an agency action is mandatory, the “no action” alternative is properly

defined as the carrying out of that action. Dep’t of Transp. v. Pub. Citizen, 541

U.S. 752, 769 (2004). But we do not agree with the district court that the Central

Valley Project Improvement Act (“CVPIA”), a part of the Reclamation Projects


                                          4
Authorization and Adjustment Act of 1992, required Reclamation to enter into the

interim contracts. The CVPIA requires “appropriate environmental review,”

including the preparation of a programmatic EIS (“PEIS”), before Reclamation is

authorized to renew an existing long-term water service contract. CVPIA

§ 3404(c)(1). After the completion of the PEIS, Reclamation “shall, upon request,

renew any existing long-term repayment or water service contract for the delivery

of water from the Central Valley Project for a period of twenty-five years.” Id.

Prior to the completion of the PEIS, Reclamation “may” renew water service

contracts for interim three- or two-year periods. Id. As the district court

acknowledged, normally, when “may” and “shall” are used in the same statute, the

“‘inference is that each is being used in its ordinary sense—the one being

permissive, the other mandatory.’” Ctr. for Biological Diversity v. U.S. Fish &

Wildlife Serv., 450 F.3d 930, 935 (9th Cir. 2006) (quoting Haynes v. United States,

891 F.2d 235, 239-40 (9th Cir. 1989)) (interpreting Endangered Species Act). We

also reject Reclamation’s argument that the contracts themselves mandated

renewal. NEPA imposes obligations on agencies considering major federal actions

that may affect the environment. An agency may not evade these obligations by

contracting around them.




                                          5
      Accordingly, the district court erred in dismissing plaintiffs’ claim regarding

the “no action” alternative.

II. Statement of Purpose and Need

      The EA’s statement of purpose and need did not unreasonably narrow

Reclamation’s consideration of alternatives. See Alaska Survival v. Surface

Transp. Bd., 705 F.3d 1073, 1084 (9th Cir. 2013). The statement did not assume

that contract quantities would remain the same, and it was not an abuse of

discretion. See id.

III. Reduction in Water Quantity

      Reclamation’s decision not to give full and meaningful consideration to the

alternative of a reduction in maximum interim contract water quantities was an

abuse of discretion, and the agency did not adequately explain why it eliminated

this alternative from detailed study. See Te-Moak Tribe of W. Shoshone of Nev. v.

U.S. Dep’t in Interior, 608 F.3d 592, 602 (9th Cir. 2010); Native Ecosys. Council

v. U.S. Forest Serv., 428 F.3d 1233, 1245 (9th Cir. 2005). The four reasons set

forth in the EA do not establish the non-viability of the alternative of maximum

water quantity reduction. See W. Watersheds Project v. Abbey, 719 F.3d 1035,

1050 (9th Cir. 2013) (holding that existence of viable but unexamined alternative

renders EA inadequate).


                                          6
      The first reason given by Reclamation was that the Reclamation Project Act

mandates renewal of existing contract quantities when beneficially used. See 43

U.S.C. § 485h-1(1) & (4). The EA stated that the water districts had complied with

contract terms, and, according to water needs assessments performed by

Reclamation, each water district’s needs equaled or exceeded the current total

contract quantity. Plaintiffs exhausted administrative remedies as to their

argument that Reclamation did not know whether existing water quantities were

“beneficially used” because Reclamation did not conduct a proper water needs

assessment, as contractually required, and Reclamation’s 2006 assessment was

inadequate because it was prepared with data from 1999 that predated a land

retirement project. See Barnes v. U.S. Dep’t of Transp., 655 F.3d 1124, 1132 (9th

Cir. 2011) (holding that issue was exhausted when agency had independent

knowledge of EA flaw); Lands Council v. McNair, 629 F.3d 1070, 1076 (9th Cir.

2010) (holding that issue is exhausted if agency is provided sufficient information

to give it a chance to bring its expertise to bear to resolve the claim). As plaintiffs

argue, Reclamation acted unreasonably by relying on stale water needs data. See

W. Watersheds Project, 719 F.3d at 1052 (holding that “an agency errs when it

relies on old data without showing that the data remain accurate”).




                                           7
      Reclamation’s second reason for concluding that consideration of a

reduction in interim contract water quantities was not warranted was that the

Central Valley Project-wide PEIS for long-term contract renewal selected a

preferred alternative of renewal “for the full contract quantities.” Additionally, the

PEIS took into account the balancing requirements of the CVPIA, which provides,

among other things, for the weighing of fish, wildlife, and habitat restoration goals.

The PEIS did not, however, address site-specific impacts of individual contracts.

See W. Watersheds Project, 719 F.3d at 1050-51 (holding that when modification

of grazing practices was not considered at programmatic level, it must be given

hard and careful look at site-specific level). The government’s position that the

consideration of reduced-quantity alternatives should be required only with respect

to “long-term contract renewals” (Answering Brief at 47) is unreasonable under the

circumstances presented here, involving an ongoing – and hence long-term – series

of interim renewals.

      Reclamation’s third reason was that a shortage provision in the interim

contracts provided it with a mechanism for annual adjustments in water supplies.

As plaintiffs argue, however, the existence of a mechanism for adjusting water

quantities after contract approval did not relieve Reclamation of its obligation to

consider a reduction in quantities prior to contract approval. See id. at 1050.


                                           8
      Reclamation’s fourth reason was that “retaining the full historic water

quantities under contract provides the contractors with assurance the water would

be made available in wetter years and is necessary to support investments for local

storage, water conservation improvements and capital repairs.” This reasoning in

large part reflects a policy decision to promote the economic security of

agricultural users, rather than an explanation of why reducing maximum contract

quantities was so infeasible as to preclude study of its environmental impacts. See

id. Moreover, given the shortage provisions in the interim contracts and recent

drought conditions, the water districts have not been able to rely on delivery of

consistent quantities.

      We therefore reverse as to the district court’s grant of summary judgment on

plaintiffs’ claim that the EA was inadequate because it did not give full and

meaningful consideration to the alternative of a reduction in maximum water

quantities. See id.

IV. Geographic Scope

      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. See Save Our


                                          9
Sonoran, Inc. v. Flowers, 408 F.3d 1113, 1122 (9th Cir. 2004) (holding that agency

must analyze all environmental consequences of action). This contention lacks

merit because the EA was tiered off of the PEIS, 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. See Friends of the Wild Swan v. Weber, 767

F.3d 936, 943 (9th Cir. 2014) (stating that agency must balance need for

comprehensive analysis against considerations of practicality).

V. Impacts on Listed Species and Cumulative Impacts

      Plaintiffs waived their argument that the EA’s analysis of the giant garter

snake and the California least tern impermissibly equated a finding of no jeopardy

under the Endangered Species Act with a finding of no significant impact under

NEPA. See Lands Council, 629 F.3d at 1076. Impacts on salmonids and green

sturgeon, as well as cumulative impacts related to drainage and selenium, were

more appropriately addressed in the PEIS and the San Luis Drainage Feature Re-

Evaluation Final EIS, rather than the EA for interim contract renewal. See Friends

of the Wild Swan, 767 F.3d at 943.


                                         10
      We affirm the district court’s judgment in part. We reverse in part and

remand with instructions for the district court to vacate its grant of summary

judgment in favor of defendants on plaintiffs’ claim that the EA was inadequate

because it did not give full and meaningful consideration to the alternative of a

reduction in maximum water quantities. On remand, the district court shall direct

Reclamation consider such an alternative in any future EA for an interim contract

renewal. In satisfying this duty, Reclamation may rely upon any water needs

assessment for which the data remain accurate. See W. Watersheds Project, 719

F.3d at 1052. We also reverse the district court’s dismissal of plaintiffs’ claim that

the “no action” alternative set forth in the EA was inadequate under NEPA.

      Each party shall bear its own costs.

      AFFIRMED in part, REVERSED in part, and REMANDED.




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