Cure Land, LLC v. U.S. Dep't of Agric.

CURE LAND, LLC, and CURE LAND II, LLC, Plaintiffs, v. UNITED STATES DEPARTMENT OF AGRICULTURE, TOM VILSACK,in his official capacity as Secretary of the United States Department of Agriculture,FARM SERVICE AGENCY, an Agency of the United States Department of Agriculture,and JUAN M. GARCIA, in his official capacity as Administrator of the Farm Service Agency, Defendants.

Civil Action No. 12-cv-2388-WJM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

August 14, 2014

Judge William J. Martínez

ORDER AFFIRMING AGENCY'S DECISION

Plaintiffs Cure Land, LLC and Cure Land II, LLC (jointly the "Plaintiffs") bring this action against Defendants the United States Department of Agriculture ("USDA"), the Farm Service Agency ("FSA") (jointly the "Agency"), Tom Vilsack in his official capacity as Secretary of the USDA, and Juan M. Garcia in his official capacity as Administrator of the FSA (collectively the "Defendants"). (ECF No. 1.) This matter is before the Court pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-706, on Plaintiffs' appeal of the Agency's decision to exclude certain lands from a proposed water conservation program. (Id.) For the reasons set forth below, the Agency's decision is affirmed.

I. BACKGROUND

A. Statutory Background

The National Environmental Policy Act ("NEPA") is "[t]he centerpiece of environmental regulation in the United States". New Mexico ex rel. Richardson v. Bureau of Land Mgmt., 565 F.3d 683, 703 (10th Cir. 2009). NEPA's "twin aims" require a federal agency "to consider every significant aspect of the environmental impact of a proposed action," and to "inform the public that it has indeed considered environmental concerns in its decision-making process." Baltimore Gas & Elec. Co. v. Natural Res. Defense Council, 462 U.S. 87, 97 (1983). "The Act does not require agencies to elevate environmental concerns over other appropriate considerations, however; it requires only that the agency take a 'hard look' at the environmental consequences before taking a major action." Utah Shared Access Alliance v. U.S. Forest Serv., 288 F.3d 1205, 1207-08 (10th Cir. 2002) (citing Baltimore Gas, 462 U.S. at 97). That is, NEPA "'merely prohibits uninformed—rather than unwise—agency action.'" Richardson, 565 F.3d at 704 (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 351 (1989)).

"Before an agency may take 'major Federal actions significantly affecting the quality of the human environment,' an agency must prepare an environmental impact statement ("EIS") in which the agency considers the environmental impacts of the proposed action and evaluate[s] 'alternatives to the proposed action,' including the option of taking 'no action.'" Silverton Snowmobile Club v. U.S. Forest Serv., 433 F.3d 772, 780 (10th Cir. 2006) (quoting 42 U.S.C. § 4332(2)(C); 40 C.F.R. § 1502.14(d)).However, "[i]f an agency is uncertain whether the proposed action will significantly affect the environment, it may prepare a considerably less detailed environmental assessment" ("EA") to determine whether an EIS is necessary. Utah Envtl. Cong. v. Bosworth, 443 F.3d 732, 736 (10th Cir. 2006) (citing 40 C.F.R. § 1508.9). If the EA concludes that the proposed project will have a significant effect on the environment, the agency must then develop an EIS; if not, the agency then issues a "Finding of No Significant Impact" ("FONSI"), and no further agency action is required. Id.

In addition to these procedural requirements, "[a]t all stages throughout the process, the public must be informed and its comments considered." Richardson, 565 F.3d at 704 (citing 40 C.F.R. §§ 1503.1, 1505.2, 1506.10). NEPA does not circumscribe "the substantive action an agency may take—the Act simply imposes procedural requirements intended to improve environmental impact information available to agencies and the public." Id.

B. Factual and Procedural Background

This action arises out of a proposed amendment to the Colorado Republican River Conservation Reserve Enhancement Program ("RR CREP"). The RR CREP is a federal-state program in which enrolled cropland owners receive federal funding in exchange for agreeing to cease irrigation of their lands, with the aim of conserving water, improving water quality, controlling erosion, and protecting wildlife. (Amended Admin. Record ("R.") (ECF No. 29) at CL01600-15.) The RR CREP Agreement involves the USDA and the State of Colorado, among other parties, and is administered by the FSA, an agency of the USDA. (Id. at CL01352-64.) The RR CREP Agreementwas entered into in April 2006. (Id.)

In June 2007, an amendment was proposed to the RR CREP Agreement ("Amendment"), which included the addition of an area of land known as the "Target Zone" within which Colorado's Republican River Water Conservation District (the "District") could purchase the water rights. (R. at CL01184-85.) The District intended to use the RR CREP funds to further incentivize landowners in the Target Zone to agree to divert water to a pipeline that would feed into the Republican River, thereby helping the State of Colorado meet its water supply obligations under a compact with Kansas and Nebraska. (Id.) In 2008, pursuant to this plan, the District purchased some of the water rights to lands owned by Plaintiffs in the Target Zone. (Id. at CL01114-15.) In the course of considering the Amendment, the Agency expressed concerns regarding the inclusion of the Target Zone in the RR CREP. Specifically, the Agency considered whether a Target Zone landowner could be a voluntary participant in the CREP if compliance with the compact was mandatory, and whether diverting water to the pipeline would have conservation benefits, given that the water could later be used by other states rather than conserved. (See id. at CL00615-18, 621-22.)

In October 2009, the Agency informed Colorado that it generally supported the Amendment and intended to prepare a supplemental environmental assessment to evaluate the Amendment's environmental impact ("Supplemental EA"). (R. at CL00699.) During the course of these preparations, the Agency began to receive public comments regarding the Amendment, some of which challenged the inclusion of the Target Zone. (See, e.g., id. at CL01750.) This opposition initially came from one individual who argued that the Target Zone lands were principally owned by one family,which would stand to profit inequitably from selling their water rights to the District for compact compliance, while also receiving RR CREP funds. (See id.) However, the Agency then began receiving similar comments from other individuals, indicating a broader controversy and prompting the Agency to hold a public meeting in October 2010 to solicit verbal comments on the Supplemental EA. (Id. at CL00806, 1690.) The Agency received several verbal comments at the public meeting, and subsequently received several written comments from individuals, letters from other conservation districts rescinding previous support for the Amendment, and a petition with 90 signatures, most of which challenged the inclusion of the Target Zone in the Amendment. (Id. at CL00771, 800.)

In December 2010, the Agency published the Final Supplemental EA (R. at CL00379-464), which concluded that the Amendment as a whole would have environmental benefits and would have "no expected long term significant negative impacts . . . ." (Id. at 00427.) The Supplemental EA reviewed the comments received in opposition to the inclusion of the Target Zone, and generally noted that no change to the EA was required. (Id. at CL00444, 449-460.) In a few instances, the Supplemental EA declined to respond to the commenters' concerns regarding the fairness of the incentive payments and the equity of including the Target Zone in the Amendment, because such issue was deemed "not an issue for the EA". (Id. at CL00452, 53.)

In December 2010, the Agency prepared a draft decision document concluding that no significant environmental impact would occur ("Draft FONSI") if the Amendment were implemented as originally proposed. (R. at CL01867.) However, the Draft FONSIwas not finalized due to concerns regarding the public controversy, amongst other factors. (See id. at CL01525-30.) On April 16, 2012, the Agency issued a FONSI that removed the Target Zone from the proposed Amendment. (Id. at CL00375-76.)

On September 7, 2012, Plaintiffs filed this action challenging the Agency's decision to exclude the Target Zone from the Amendment. (ECF No. 1.) Plaintiffs' Opening Brief was filed on May 1, 2013. (ECF No. 30.) Defendants filed their Response Brief on May 31, 2013 (ECF No. 31), and fourteen days later, Plaintiffs filed their Reply (ECF No. 32).

II. LEGAL STANDARD

The role of a court reviewing a NEPA challenge "is simply to ensure that the agency has adequately considered and disclosed the environmental impact of its actions and that its decision is not arbitrary and capricious." Baltimore Gas, 462 U.S. at 97-98; see also Richardson, 565 F.3d at 704 ("As with other challenges arising under the APA, we review an agency's NEPA compliance to see whether it is 'arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.'") (quoting 5 U.S.C. § 706(2)(A)).

An agency's decision is considered arbitrary and capricious if it "(1) entirely failed to consider an important aspect of the problem, (2) offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise, (3) failed to base its decision on consideration of the relevant factors, or (4) made a clear error of judgment." Richardson, 565 F.3d at 704 (quotations omitted). The Court's"inquiry under the APA must be thorough, but the standard of review is very deferential to the agency. . . . A presumption of validity attaches to the agency action and the burden of proof rests with [the party raising the...