Natural Resources Defense Council v. Norton, 236 F. Supp. 3d 1198

Background

Plaintiffs (NRDC-led coalition) challenge Reclamation and FWS/NMFS decisions renewing and implementing long-term Central Valley water contracts (SRS and DMC) based on allegedly inadequate ESA Section 7 consultation, adding claims in the Fourth Supplemental Complaint (4SC).
The 2004–05 FWS BiOps addressing delta smelt were later invalidated; FWS issued a 2008 BiOp finding jeopardy and Reclamation sought re-consultation; Reclamation obtained a 2015 letter of concurrence (LOC) asserting the 2008 BiOp addressed contract effects.
Plaintiffs’ new claims: (Fourth) FWS failed to adequately re-consult re: delta smelt; (Fifth) Reclamation failed to reinitiate consultation with NMFS for winter- and spring-run Chinook based on new information; (Sixth) Reclamation and SRS Contractors unlawfully ‘took’ Chinook in 2014–2015 by depleting Shasta cold-water storage.
Court stayed case for re-consultation, then allowed 4SC; motions to dismiss followed by supplemental briefing and the Court’s October 20, 2016 order narrowing issues and seeking briefing on whether contract terms leave Reclamation discretion to trigger re-initiation.
The Court applies EPIC/Houston precedent to require that, for re-initiation based on executed contracts, plaintiffs must plausibly allege contractual or legal authority that leaves the agency discretion to modify contract terms (not just discretion in implementation).

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Reclamation retained sufficient discretionary involvement/control under SRS contracts to require re-initiation of consultation with NMFS (Fifth Claim).	Plaintiffs: contract provisions and agency practice leave Reclamation discretion over implementation (schedules, rates, transfers, forecasting) that could mitigate salmon harm, triggering §402.16(b).	Defs: EPIC/Houston require discretionary authority to modify executed contracts; SRS terms generally fix quantities/allocations and constrain meaningful unilateral modification.	Dismissed: Plaintiffs failed to plausibly allege contract-based discretion to materially revise executed contracts; Fifth Claim dismissed.
Whether SRS Contractors plausibly causally contributed to Section 9 take for 2014–2015 salmon deaths (Sixth Claim vs. contractors).	Plaintiffs: Contractors’ diversions were the physical mechanism that, but-for, led Reclamation to release water and deplete cold-water pool, causing lethal temperatures.	SRS Contractors: pleadings lack particularized factual allegations tying contractor acts to take.	Denied as to contractors: Court found plausible but-for causation from contractors’ diversions; claim proceeds against contractors.
Whether the 2009 NMFS OCAP BiOp Incidental Take Statement (ITS) shields Federal Defendants from Section 9 liability for the alleged takes.	Plaintiffs: ITS did not and could not cover non-discretionary deliveries to SRS contractors; ITS itself recognizes limits and excludes nondiscretionary deliveries.	Federal Defendants: the ITS covered overall OCAP impacts, so take is covered if ITS terms complied with.	Partially denied: Court concludes ITS does not plainly cover non-discretionary SRS deliveries; ITS unlikely to immunize Reclamation for non-discretionary contract-driven takes.
Whether Federal Defendants can be the proximate cause of Section 9 take for actions they are legally required to perform (non-discretionary).	Plaintiffs: agency liability can attach where agency conduct (including some discretionary implementation) proximately causes take.	Federal Defendants: Public Citizen / proximate-cause principles bar liability when agency lacks statutory ability to prevent the effect (i.e., actions are nondiscretionary).	Mixed: Court holds an agency implementing a legally mandated, non-discretionary contract term cannot be the proximate cause of Section 9 take; but Federal Defendants remain liable where they retain some control (narrowly allowed: where Reclamation may require GCID to divert up to 20,315 AF from Stony Creek and where approval of transfers proximately caused take).

Key Cases Cited

Nat. Res. Def. Council v. Jewell, 749 F.3d 776 (9th Cir. 2014) (agency retains “some discretion” at renewal stage triggering §7 consultation requirement)
Envtl. Prot. Info. Ctr. v. Simpson Timber Co., 255 F.3d 1073 (9th Cir. 2001) (to require re-initiation, plaintiff must allege agency retained discretionary involvement/control sufficient to modify permit/contract terms to benefit other species)
Nat’l Ass’n of Home Builders v. Defenders of Wildlife, 551 U.S. 644 (2007) (Section 7 applies only to actions with discretionary federal involvement or control)
U.S. Dep’t of Transp. v. Public Citizen, 541 U.S. 752 (2004) (proximate-cause analysis limits agency responsibility where it lacks statutory ability to avoid the effect)
Nat. Res. Def. Council v. Houston, 146 F.3d 1118 (9th Cir. 1998) (agency discretion during contract negotiation can trigger consultation obligations)
San Luis & Delta-Mendota Water Auth. v. Locke, 776 F.3d 971 (9th Cir. 2014) (OCAP BiOps may evaluate overall impacts without segregating discretionary and nondiscretionary actions)
TVA v. Hill, 437 U.S. 153 (1978) (ESA’s broad purpose to prevent extinction and conserve ecosystems)