Barnum Timber Co. v. United States Envtl. Prot. Agency

633 F.3d 894

72 ERC 1225

11 Cal. Daily Op. Serv. 1629

2011 Daily Journal D.A.R. 2013

BARNUM TIMBER CO., a California limited partnership, Plaintiff–Appellant,

v.UNITED STATES ENVIRONMENTAL PROTECTION AGENCY and Lisa Jackson, Defendants–Appellees.

No. 08–17715.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 11, 2010.Filed Feb. 3, 2011.

Damien Schiff, Pacific Legal Foundation, Sacramento, CA, for the appellant.Andrew Mergen and Jason Walta, U.S. Department of Justice, Environment & Natural Resources Division, Washington, D.C., for the appellee.Appeal from the United States District Court for the Northern District of California, William H. Alsup, District Judge, Presiding. D.C. No. 3:08–CV–01988–WHA.Before: STEPHEN REINHARDT and JAY S. BYBEE, Circuit Judges, and JAMES S. GWIN, District Judge.^*Opinion by Judge BYBEE; Dissent by Judge GWIN.

OPINION

BYBEE, Circuit Judge:

Plaintiff–Appellant Barnum Timber Company (“Barnum”) owns and operates nonindustrial timberlands and rangelands in Northern California, including land in the Redwood Creek watershed. It appeals the district court's dismissal of its action against the Defendant–Appellees, the U.S. Environmental Protection Agency (“EPA”). Barnum brought suit in district court under the Administrative Procedure Act (“APA”) to challenge EPA's decision to retain the Redwood Creek as an impaired water body under § 303(d) of the Clean Water Act (“CWA”). The district court dismissed Barnum's suit for lack of Article III standing but granted leave to file an amended complaint. Barnum moved to amend the complaint, but the district court denied the motion for failure to remedy the standing deficiency and entered judgment dismissing the case. Barnum appeals.

We conclude that Barnum's amended complaint demonstrated that Barnum has standing as a landowner whose property values are adversely impacted to challenge EPA's retention of Redwood Creek as a § 303(d) impaired water body. Accordingly, we reverse the judgment of the district court and remand the case for further proceedings.

I. BACKGROUND

Plaintiff–Appellant Barnum Timber Company (“Barnum”) is a California limited partnership that owns property and conducts timber-harvesting operations in the Redwood Creek watershed near Eureka, California. Section 303(d) of the CWA, 33 U.S.C. § 1313(d), is part of what we termed “the Act's carrot-and-stick approach to attaining acceptable water quality without direct federal regulation of nonpoint sources of pollution.” Pronsolino v. Nastri, 291 F.3d 1123, 1127 (9th Cir.2002). The CWA requires that each state identify bodies of water within its boundaries that are impaired by effluent (§ 303(d)(1)(A)) or thermal (§ 303(d)(1)(B)) pollution and then periodically submit a list of the impaired water bodies to EPA for approval. CWA § 303(d)(2), 33 U.S.C. § 1313(d)(2). Once EPA has approved a state's list, the state and EPA must develop maximum pollution levels for the impaired water bodies called “total maximum daily loads” (TMDL). 33 U.S.C. § 1313(d)(1)(C). Under the CWA, the state must create a plan to bring the impaired water bodies into compliance with the TMDLs. Id. As we have previously made clear, “[t]he states are required to set water quality standards for all waters within their boundaries regardless of the sources of the pollution entering the waters. If a state does not set water quality standards, or if the EPA determines that the state's standards do not meet the requirements of the [CWA], the EPA promulgates standards for those states.” Id. at 1127.¹ In the State of California, any water bodies included on the § 303(d) list are also subject to state regulations. Cal. Code Regs. tit. 14, § 898.

Redwood Creek was first placed on California's § 303(d) list in 1992. It has remained on the list since that time. In 2006, California reevaluated its § 303(d) list, as it is required by statute to do periodically, 33 U.S.C. § 1313(d)(2), and submitted it to EPA for approval, with Redwood Creek listed as being impaired by both sediment and temperature. EPA approved the list, including the Redwood Creek's listing as an impaired water body. See 72 Fed.Reg. 12175 (2007).

Barnum sued EPA in federal district court, challenging EPA's decision to “retain Redwood Creek on the Section 303(d) list of impaired water bodies” as arbitrary and capricious. See 5 U.S.C. § 706(2)(A). Barnum claimed two bases for its injury: First, it argued that, as a consequence of EPA's decision, it had “suffered extra costs to satisfy land use restrictions” triggered by the Redwood Creek's § 303(d) listing, and second, that it “has seen its property values decrease.”

EPA moved for dismissal for lack of constitutional standing. The district court granted that motion without prejudice for leave to amend the complaint. The district court found that Barnum's first complaint “offered only conclusory and nonspecific claims of injury” and failed to establish that their alleged injuries “were caused by or are in any way connected to the EPA's 2006 approval of California's listing of Redwood Creek.” Specifically, the district court found that Barnum had “identifie[d] no connection between the state regulation causing its injury and the EPA's Section 303(d) action” and that Barnum had “offer[ed] nothing to support” its assertion of reduced property values, “other than the bare allegation itself.”

Barnum moved to file an amended complaint and attached declarations by Thomas M. Herman and James M. Able, California forestry experts, who explained that the property value of Barnum's land had decreased because of the Redwood Creek's § 303(d) listing. But the district court denied Barnum's motion because “the proposed amendment would not cure the standing problem,” dismissed the action, and entered final judgment against Barnum. Barnum here appeals. ²

II. STANDING

The district court's decisions to dismiss Barnum's initial complaint, to dismiss Barnum's motion to file an amended complaint, and to enter judgment dismissing Barnum's case all center on a single question: Does Barnum have standing to challenge EPA's retention of Redwood Creek as a CWA § 303(d) impaired water body? Specifically at issue here is whether Barnum's amended complaint meets the constitutional requirements for standing.³

Article III of the U.S. Constitution confines federal courts to hearing only “cases” and “controversies.” Standing is a core component of the Article III case or controversy requirement. Lujan v. Defenders of Wildlife, 504 U.S. 555, 560, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). To establish constitutional standing, plaintiffs must demonstrate three elements, which constitute the “irreducible ... minimum” of Article III standing, id. at 560, 112 S.Ct. 2130: (1) injury-in-fact—plaintiff must allege “concrete and particularized” and “actual or imminent” harm to a legally protected interest, id. at 560–61, 112 S.Ct. 2130; (2) causal connection—the injury must be “fairly traceable” to the conduct complained of, Allen v. Wright, 468 U.S. 737, 751, 104 S.Ct. 3315, 82 L.Ed.2d 556 (1984); and (3) redressability—a favorable decision must be “likely” to redress the injury-in-fact, Lujan v. Defenders of Wildlife, 504 U.S. at 560–61, 112 S.Ct. 2130. We will discuss each element in turn.

A. Injury–in–Fact

We begin our analysis with the first element of constitutional standing: injury-in-fact. We acknowledge injury-in-fact was not raised as an issue for appeal: the district court found EPA had conceded the existence of Barnum's injury-in-fact, and neither party argued the existence of injury-in-fact in their briefs on appeal. But because “standing is a necessary element of federal-court jurisdiction,” Thomas v. Mundell, 572 F.3d 756, 760 (9th Cir.2009), we must ensure Barnum has met all the requirements of constitutional standing. Understanding Barnum's injury will help frame the remaining issues as well.

Barnum alleges as its injury-in-fact that it suffered a reduction in the economic value of its property in the Redwood Creek watershed. A specific, concrete, and particularized allegation of a reduction in the value of property owned by the plaintiff is sufficient to demonstrate injury-in-fact at the pleading stage. See Lujan, 504 U.S. at 560, 112 S.Ct. 2130. In this case, Barnum has submitted two declarations by forestry experts, testifying to the property value reductions. Certainly the Supreme Court has been satisfied by less. In Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 112 S.Ct. 2886, 120 L.Ed.2d 798 (1992), for example, the Court found that a complaint including a request for “damages for the temporary taking of [the plaintiff's] property” was sufficient to establish injury-in-fact at the pleading stage. Id. at 1014 n. 3, 112 S.Ct. 2886. Thus we hold Barnum has met its burden of demonstrating injury-in-fact.

Unlike injury-in-fact, the remaining two elements of constitutional standing are disputed in this appeal: causal connection, that is whether Barnum's alleged injuries are fairly traceable to EPA's decision to retain Redwood Creek as an impaired water body under CWA § 303(d); and redressability, whether a favorable judgment for Barnum in its case against EPA would resolve or ameliorate Barnum's alleged injury-in-fact.

B. Causal Connection

Barnum argues that its Redwood Creek property value reduction is causally connected to EPA's retention of Redwood Creek as an impaired water body in “two distinct and individually adequate” ways: (1) “the Section 303(d) listing has reduced the value of Barnum's property by feeding the public's and the market's perception that Barnum's timber operations are restricted by the listing”; and (2) “the Section 303(d) listing has reduced the value of Barnum's property by triggering the application of Section 898 of the Forest Practice Rules.” See Cal. Code Regs. tit. 14, § 898. Because we credit Barnum's first argument (i.e., the effect of EPA's action on the market)...