Organized Village of Kake v. United States Department of Agriculture, 2015 U.S. App. LEXIS 13201

Background

In 2001 USDA adopted a nationwide "Roadless Rule" limiting road construction and timber harvest in inventoried roadless areas, finding application to the Tongass would risk loss of important ecological ("roadless") values.
The 2001 Record of Decision (ROD) studied four Tongass alternatives (apply, exempt, defer, selected areas) and acknowledged substantial short- and long-term socioeconomic impacts to Southeast Alaska if the Rule applied.
In 2003, on the same administrative record, USDA issued a new ROD promulgating a Tongass Exemption, concluding the Tongass Forest Plan adequately protected roadless values and that socioeconomic harms outweighed ecological benefits.
Plaintiffs (Organized Village of Kake and others) sued under the APA and NEPA; the district court held the 2003 Tongass Exemption violated the APA for failing to provide a reasoned explanation for reversing the 2001 factual findings and vacated the exemption, reinstating the Roadless Rule as to the Tongass.
On appeal, this en banc Ninth Circuit majority affirms: USDA’s 2003 ROD contradicted the 2001 ROD’s factual findings about environmental risk and lacked the reasoned explanation required when an agency changes course on factual determinations; Alaska intervened and the court found it had Article III standing to defend the exemption.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the 2003 Tongass Exemption violated the APA as arbitrary and capricious by reversing prior factual findings without reasoned explanation	Village: 2003 ROD contradicts 2001 factual findings that Tongass Forest Plan would permit loss of roadless values; USDA failed to explain the reversal	USDA/Alaska: agency may reweigh same record and prioritize socioeconomic concerns; change of administration permitted different judgment	Held: Violation. The 2003 ROD rested on factual findings directly contradicting 2001 ROD and failed to provide required reasoned explanation under Fox/State Farm; exempted rule vacated
Whether intervenor State of Alaska had Article III standing to appeal the district court judgment	Village: not contested; plaintiffs implied Alaska lacked standing	Alaska: has standing via 16 U.S.C. §500 fractional timber receipts affected by the Rule	Held: Alaska has standing. The potential effect on statutory timber-receipt entitlement constitutes an injury-in-fact sufficient for Article III standing in this APA action
Whether other rationales in 2003 ROD (public comments, litigation) justify reversal	Village: comments raised no new issues; litigation rationale implausible	USDA/Alaska: comments, litigation, and socioeconomic concerns justified exemption	Held: Rejected. Comments "raised no new issues" so cannot plausibly justify reversal; litigation rationale insufficient to support exemption
Appropriate remedy for APA violation	Village: vacate Tongass Exemption and reinstate Roadless Rule	Alaska: reinstatement improper because Roadless Rule had been enjoined at times; remedy should consider equities	Held: Vacate the Tongass Exemption; reinstatement of the previous rule is appropriate and Roadless Rule remains in effect (as Tenth Circuit rulings ultimately left it effective)

Key Cases Cited

Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (agency must address prior factual findings when rescinding an earlier rule)
FCC v. Fox Television Stations, Inc., 556 U.S. 502 (change in agency policy requires awareness of change, permissibility, belief new policy is better, and good reasons — including reasoned explanation when new facts contradict prior findings)
Kootenai Tribe of Idaho v. Veneman, 313 F.3d 1094 (9th Cir. 2002) (standing and preliminary-injunction history of Roadless Rule litigation)
Organized Village of Kake v. U.S. Dep't of Agric., 746 F.3d 970 (9th Cir. 2014) (panel decision in this litigation prior to en banc review)
Perez v. Mortg. Bankers Ass'n, 135 S. Ct. 1199 (change-of-policy review—Fox requirements and need for reasoned explanation)
Humane Society of the United States v. Locke, 626 F.3d 1040 (9th Cir. 2010) (agency must explain disparate factual findings)
Jicarilla Apache Nation v. U.S. Dep't of Interior, 613 F.3d 1112 (D.C. Cir. 2010) (prejudice standard for setting aside agency action)
Shinseki v. Sanders, 556 U.S. 396 (prejudice burden in administrative review)
Paulsen v. Daniels, 413 F.3d 999 (9th Cir. 2005) (invalid agency rule ordinarily set aside; reinstatement of prior rule)