N. Coast Rivers Alliance v. U.S. Dep't of the Interior

313 F.Supp.3d 1199

NORTH COAST RIVERS ALLIANCE, et al., Plaintiffs,

v.UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Defendants,Westlands Water District, et al., Intervenor–Defendants.

1:16–cv–00307–LJO–MJS

United States District Court, E.D. California.

Signed March 12, 2018

Stephan Coles Volker, Law Offices Of Stephan C. Volker, Berkelkey, CA, for Plaintiffs.

Joseph H. Kim, GOVT, Judith E. Coleman, U.S. Department of Justice, Washington, DC, for Defendants.

Cynthia J. Larsen, Orrick, Herrington & Sutcliffe, LLP, Sacramento, CA, for Intervenor–Defendants.

ORDER GRANTING MOTION TO DISMISS SECOND CLAIM FOR RELIEF (ECF NO. 71)

Lawrence J. O'Neill, UNITED STATES CHIEF DISTRICT JUDGE

I. INTRODUCTION

This case concerns approval by the United States Department of the Interior and its member agency, the United States Bureau of Reclamation (collectively, "Federal Defendants," "Reclamation," or the "Bureau"), of six interim renewal contracts that authorize delivery of water from March 1, 2016, through February 28, 2018, from federal reclamation facilities to certain water districts served by the federal Central Valley Project ("CVP") ("2016–18 Interim Contracts").¹ Doc. 64 (First Amended and Supplemental Complaint ("FASC") ). The 2016–18 Interim Contracts at issue in this case provide water service to Westlands Water District, Santa Clara Valley Water District, and Pajaro Valley Water Management Agency (collectively, "Interim Contractors"). See FASC at ¶ 2. A coalition of environmental organizations led by the North Coast Rivers Alliance (collectively, "Plaintiffs") allege in the FASC's first claim for relief that Federal Defendants issued a deficient Revised Environmental Assessment ("EA") and associated Finding of No Significant Impact ("FONSI")² prior to approval of the Interim Contracts, in violation of the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq. , and Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 – 706. FASC at ¶¶ 45–65. The second claim for relief alleges that Reclamation violated NEPA by failing to prepare an Environmental Impact Statement ("EIS") for the 2016–18 Interim Contracts. Id. at ¶¶ 56–59.

Before the Court for decision is Westlands Water District's and Panoche Water District's ("Defendant Intervenors") motion to dismiss the second claim for relief in the FASC for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6) on the ground that the proposed action does not alter the status quo and therefore cannot trigger NEPA's requirement for preparation of an EIS. ECF No. 69. Federal Defendants join the motion, provided it is decided under the Rule 12(b)(6) standard and note cases declining to limit summary judgment briefing by federal agency defendants based upon denial of an intervenor's motion to dismiss. ECF No. 72. Plaintiffs oppose the motion. ECF No. 71. Defendant Intervenors replied. ECF No. 73. The matter was taken under submission on the papers pursuant to Local Rule 230(g). ECF No. 74.

II. BACKGROUND

This case is related to an earlier case, Pacific Coast Federation of Fishermen's Ass'ns v. U.S. Dep't of the Interior ("PCFFA "), 1:12–cv–01303–LJO–MJS, which concerned a similar challenge to the NEPA review performed in connection with eight interim contracts that covered the period of time from March 1, 2012 through the end of February 2014 ("2012–2014 Interim Contracts"). See PCFFA , ECF No. 47. The first amended complaint in that case ("PCFFA FAC"), filed December 4, 2012, contained two causes of action similar to those alleged here: (1) that the EA prepared by Federal Defendants in connection with the eight Interim Contracts is inadequate; and (2) that Federal Defendants should have prepared an EIS. Id.

Federal Defendants and Defendant Intervenors moved to dismiss both claims in the PCFFA FAC. PCFFA ECF No. 45–46. A March 8, 2013 Order granted the motions in part. PCFFA ECF No. 52; Pac. Coast. Fed'n of Fishermen's Ass'ns v. U.S. Dep't of the Interior , 929 F.Supp.2d 1039, 1044–46 (E.D. Cal. 2013). Among other things, Plaintiffs, whose opposition to the motion to dismiss primarily focused upon undermining Federal Defendants' choice of a "status quo" alternative as the "No Action Alternative," appeared to concede that that the Proposed Action, which proposed only a small water pricing difference from the No Action Alternative, would not alter the "status quo" of CVP operations. See PCFFA ECF No. 48 at 12–13 (indicating assent to the proposition that the No Action Alternative as defined in this EA was the continuation of the status quo). Accordingly, after finding the No Action Alternative to be appropriate, the Court dismissed Plaintiffs' second cause of action demanding that an EIS be prepared, relying in part on a line of cases which stand for the proposition that no EIS is required for a project that does not alter the status quo. PCFFA ECF No. 52 at 10–20. After cross motions for summary judgment decided the remaining claims concerning the EA and FONSI in February 2014, PCFFA ECF No. 88, an appeal was taken in March 2014. PCFFA ECF No. 93.

While the PCFFA appeal was pending, Reclamation issued its EA and FONSI for the 2016–18 Interim Contracts. Plaintiffs sued, raising claims substantially similar to those in PCFFA : (1) that the EA/FONSI was inadequate under NEPA; and (2) that Reclamation should have prepared an EIS for the 2016–18 Interim Contracts. ECF No. 2.

On July 25, 2016, the Ninth Circuit reversed in part this Court's summary judgment ruling in PCFFA , remanding for further proceedings in connection with the EA/FONSI claim. Specifically, the Ninth Circuit found that, despite the fact that the Central Valley Project Improvement Act ("CVPIA"), Pub. L. No. 102–575, 106 Stat. 4700 (1992), mandates renewal of long-term water service contracts, the CVPIA does not require Reclamation to enter into interim contracts and therefore the "no action" alternative articulated in the EA for the 2012–2014 Interim Contracts unlawfully assumed interim contract renewal. PCFFA ECF No. 102 (Amended Memorandum); Pac. Coast Fed'n of Fishermen's Ass'ns v. U.S. Dep't of the Interior , 655 Fed.Appx. 595, 597–99 (9th Cir. 2016) (" PCFFA Appellate Ruling "). The Ninth Circuit also held that "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." Id. at 599. While acknowledging that the Reclamation Project Act mandates renewal of existing contract quantities when water is beneficially used, Id. (citing 43 U.S.C. § 485h–1(1) & (4) ), the Ninth Circuit found that Reclamation "acted unreasonably by relying on stale water needs data." Id. The Ninth Circuit also affirmed this Court's ruling regarding the geographic scope of the EA. Id. at 599–01. The matter was remanded to this Court with instructions to vacate the grant of summary judgment in favor of defendants on plaintiffs' claim that the EA for the 2012–14 Interim Contracts was inadequate because it did not give full and meaningful consideration to the alternative of a reduction in maximum water quantities. Id. Reclamation was directed to "consider such an alternative in any future EA for an interim contract renewal." Id. In particular, the Ninth Circuit indicated that "[i]n satisfying this duty, Reclamation may rely upon any water needs assessment for which the data remain accurate." Id.

In light of the PCFFA Appellate Ruling , Federal Defendants moved for voluntary remand without vacatur of the EA/FONSI prepared in connection with the 2016–18 Interim Contracts. ECF No. 42 at 4–5. Plaintiffs did not oppose remand but requested that the Court vacate, set aside, or otherwise rescind the 2016–18 Interim Contracts. ECF No. 44. The Court granted Federal Defendants' motion and denied Plaintiffs' request for vacatur. ECF No. 52. The Case was stayed until further notice, the Court retained jurisdiction, and Federal Defendants were required to submit periodic status reports on the progress of remand. Id.

On May 31, 2017, Reclamation issued a revised final EA and FONSI for the 2016–18 Interim Contracts. See ECF No. 56. Plaintiffs amended their complaint to address these new documents. See FASC. Defendant Intervenors' motion to dismiss the second claim for relief followed. ECF No. 69.

III. STANDARD OF DECISION

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) is a challenge to the sufficiency of the allegations set forth in the complaint. Navarro v. Block , 250 F.3d 729, 732 (9th Cir. 2001). A 12(b)(6) dismissal is proper where there is either a "lack of a cognizable legal theory" or "the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pacifica Police Dept. , 901 F.2d 696, 699 (9th Cir. 1990). In determining whether a complaint states a claim upon which relief may be granted, the Court accepts as true the allegations in the complaint, construes the pleading in the light most favorable to the party opposing the motion. Lazy Y Ranch Ltd. v. Behrens , 546 F.3d 580, 588 (9th Cir. 2008).

Under Rule 8, a complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2), in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A plaintiff is required to allege "enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). "The plausibility standard is not akin to a ...