Case summaries.

I. ENVIRONMENTAL QUALITY

A. Clean Air Act

1. Oxygenated Fuels Ass'n, Inc. v. Davis, 331 F.3d 666 (9th Cir. 2003).

Oxygenated Fuels Association (OFA) sued former California Governor Gray Davis and Alan C. Lloyd, Chairman of the California Air Resources Board (collectively California), claiming that California's law banning the use of methyl tertiary-butyl ether (MTBE) as an oxygenator in gasoline was preempted by the Clean Air Act (CAA) (1) and should therefore be enjoined. The district court granted California's motion to dismiss the suit for failure to state a claim, finding that California's MTBE ban was expressly exempted from preemption by CAA section 211(c)(4)(A), (2) and that even if it was not exempted, it was not preempted. (3) The Ninth Circuit affirmed the district court decision, finding that although the MTBE ban was not expressly exempted from preemption by the CAA, it did not conflict with the purpose of the CAA, so was not preempted.

Congress enacted the CAA "to protect and enhance the quality of the Nation's air." (4) The CAA relies on reductions in motor vehicle emissions to help achieve this goal. As part of the effort to reduce motor vehicle emissions, the CAA requires gasoline in some parts of the country to contain 2% oxygen by weight. (5) MTBE is one of the two most widely used chemicals added to gasoline to achieve that objective. The California legislature, having determined that MTBE pollutes groundwater, banned its use as a fuel additive in California as of December 31, 2002. (6) OFA, a trade association representing MTBE producers, argued that federal law, rather than state law, governs the regulation of oxygenators, and therefore the California ban was illegal.

The Ninth Circuit reviewed the district court's dismissal for failure to state a claim de novo. To determine preemption, the Ninth Circuit looked for guidance from the United States Supreme Court, which has recognized three situations in which federal law may preempt state law: 1) when Congress states explicitly that it does, 2) in fields that "Congress intended the Federal Government to occupy exclusively," and 3) when the state law "actually conflicts" with the federal law. (7) In addition, federal law does not preempt state law of Congress states explicitly that it does not.

California argued that CAA section 211(c)(4)(B) (8) explicitly exempted the state from CAA preemption. This provision states that California "may at any time prescribe and enforce, for the purpose of motor vehicle emission control, a control or prohibition respecting any fuel or fuel additive." (9) OFA argued that, because MTBE was not banned "for the purpose of motor vehicle emission control," the ban did not fall under the section 211(c)(4)(B) exemption. (10) California responded that the exemption still applied because the MTBE ban was part of its overall regulatory scheme for emissions control. Unlike the district court, the Ninth Circuit agreed with OFA's argument. In reaching this conclusion, the Ninth Circuit looked to Supreme Court analyses in two other preemption cases. (11) It noted that in both cases, the Supreme Court analyzed the purpose of the challenged provisions themselves, rather than the purpose of the overall regulatory scheme. Using this model, the court held that the correct object of preemption analysis in this case was the law banning MTBE itself rather than California's emissions regulatory scheme as a whole. The Ninth Circuit concluded that, because the purpose of the MTBE ban was to protect groundwater, and the exemption only reaches California laws enacted "for the purpose of motor vehicle emission control," (12) the ban was not covered by the exemption.

OFA next contended that the state MTBE ban was impliedly preempted by the federal CAA because, by "stand[ing] as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress," (13) it conflicts with the goals of the CAA. OFA presented two arguments in support of this contention: first, that legislative history indicates Congress required the government to remain neutral on the subject of oxygenate additives, thus giving gasoline producers an unrestricted choice of oxygenate fuel additives (the "oxygenate neutrality" argument); second, that Congress "meant to ensure an adequate and reasonably priced supply of oxygenated gasoline," (14) which the MTBE ban disrupts by increasing the price of gasoline (the "market disruption" argument).

Responding to the "oxygenate neutrality" argument, the court pointed out that the plain language of the CAA gives primary responsibility for the control of air pollution to state and local governments. Finding the text of the CAA "relatively clear" on this point, (15) the court was reluctant to rely on legislative history. The court nonetheless reviewed the legislative history presented by OFA, and found evidence that Congress intended the federal government to remain neutral on the subject of oxygenate additives. The court found no evidence, however, that state governments were required to remain neutral. The court noted, moreover, that both the Ninth Circuit (16) and EPA (17) have ruled that state governments need not remain neutral, and indeed, have the authority to "choose between oxygenates." (18) The court then distinguished the Supreme Court's ruling in Geier v. American Honda Motor Co. (19) Noting that Geier required state law to defer to a federal standard, the Ninth Circuit found that in the present case there was no federal standard to which to defer because EPA had not set a standard requiring the use of MTBE. The court thus rejected the argument that the federal CAA requirement for "oxygenate neutrality" implicitly preempts the state MTBE ban.

In addressing OFA's "market disruption" argument, the Ninth Circuit acknowledged that it was required to determine whether the effects of the state MTBE ban interfere with the goals of the CAA. (20) Pointing out that the main goal of the CAA is to reduce air pollution, the court questioned OFA's assertion that "a smoothly functioning gasoline market and inexpensive gasoline" (21) are also goals of the CAA. The court noted that it had found no reference to such goals in the text of the CAA and that OFA had offered no support for its assertion. The court further noted that it must "presume that Congress did not intend to preempt areas of law that fall within the traditional exercise of the police powers of the states." (22) A court can find preemption in such areas only when it has "clear evidence" that Congress intended to preempt. (23) The Ninth Circuit determined that environmental regulation is an area of traditional state control, and found no clear evidence that Congress intended to preempt the ability of states to adopt environmental measures that may cause higher gasoline prices. Thus, the court rejected OFA's argument, finding that increases in the price of gasoline resulting from California's MTBE ban do not frustrate the goals of the CAA and thus are not implicitly preempted by the CAA.

Having found that California's MTBE ban was not preempted by the federal CAA, the Ninth Circuit affirmed the lower court's ruling granting California's motion to dismiss OFA's suit for failure to state a claim.

2. Reno-Sparks Indian Colony v. United States Environmental Protection Agency, 336 F.3d 899 (9th Cir 2003).

Reno-Sparks Indian Colony and Great Basin Mine Watch (collectively Reno-Sparks) petitioned the Ninth Circuit for review of the 2002 Nevada Rule (24) promulgated by the Environmental Protection Agency (EPA). Reno-Sparks challenged parts I and II of the 2002 Nevada Rule, which define the terms "rest of state" or "entire state" as comprising multiple baseline areas, as arbitrary, capricious, and not in accordance with the law under the Administrative Procedure Act (APA). (25) The Ninth Circuit held that the 2002 Nevada Rule is not arbitrary or capricious under the APA, and that the 2002 Nevada Rule correctly applied the "rest of state" or "entire state" reference to an area encompassing over 250 baseline areas within Nevada which were established when EPA implicitly accepted the baseline areas proposed by the State of Nevada in 1977.

The 1977 amendments to the Clean Air Act26 established baseline areas within each state after requesting state proposals for the boundaries of such baseline areas. The baseline date for a given area "is established when a major stationary source or major modification located in that baseline area submits an application for a permit under the appropriate regulations." (27) The Clean Air Act has several sets of standards with respect to air quality, including the Prevention of Significant Deterioration (PSD) program and the National Ambient Air Quality Standards (NAAQS). NAAQS are the standards that are commonly required for compliance with the Clean Air Act. The purpose of the PSD standards is to maintain the air quality in areas that had very clean air at the beginning of the program. Generally, areas designated under the NAAQS program are allowed to have higher levels of pollution than areas designated under the PSD standards. The PSD standards apply only in areas that have been previously classified as attainment or unclassifiable. Until the baseline date has been established, minor sources operating in the baseline area are subject to NAAQS and not the PSD program. The EPA rule listing official designations and baseline areas for Nevada and other states listed nonattainment areas separately, and then lumped together the portion of the state in attainment into a "rest of state" or "whole state" category shown on only one line.

In December 2001, Oil-Dri Corporation proposed mining in Nevada near land belonging to the Reno-Sparks Indian Colony. Because the baseline area around the colony had not been triggered as of the date of the proposal, Oil-Dri was not required to comply with the PSD regulations of the Clean Air Act. Reno-Sparks Indian Colony requested that EPA "subject Oil-Dri to the PSD regulations of the Clean Air Act," (28) because the terms "rest of state" and "entire state" indicated the baseline area was a large area encompassing almost the entire state, and therefore it had been triggered by previous applications from major sources.

In response to this request, EPA promulgated the 2002 Nevada Rule, which states that the terms "rest of state" and "entire state" refer not just to one large baseline area but to over 250 separate baseline areas. (29) Reno-Sparks then filed this request for review, arguing that the 2002 Nevada Rule was arbitrary and capricious under the APA.

The APA standard of review applicable to the Nevada Rule is that, unless the rule is "arbitrary, capricious, or otherwise not in accordance with the law," it should be upheld (30) To determine whether Part I of the 2002 Nevada Rule was valid, the Ninth Circuit analyzed "(1) whether Nevada initially proposed the creation of 254 baseline areas in its 1977 submission to the EPA; (2) whether the EPA adopted Nevada's recommendation with respect to baseline areas; and (3) whether any intervening regulatory action by the EPA changed the nature of Nevada's baseline area designations." (31)

Focusing on Nevada's original proposal for baseline areas, the court found support for EPA's interpretation. In 1977, Nevada submitted to EPA a proposal that created baseline areas corresponding with already defined hydrographic areas that called for 254 separate baseline areas. EPA offered an internal memo and statement in its 1979 rule that showed it had adopted the classifications in Nevada's 1977 proposal. In addition, EPA began to use these designations without making any changes to the boundaries of the areas. EPA tables indicating the amount of pollutant in each baseline area for each state use asterisks when EPA changed a state's designation of a baseline area. The "rest of state" or "entire state" designations within the table for Nevada did not contain an asterisk, which indicated EPA had not combined any of the separate baseline areas that Nevada had proposed. (32) Further, the court found that for 254 separate baseline areas in Nevada, EPA had consolidated the classification that applied to most of the baseline areas, and labeled it "rest of state" or "entire state" to avoid having to list 254 separate areas with the same levels of pollutants. EPA used the term "rest of state" or "entire state" only once in each table, indicating that it did not intend "rest of state" or "entire state" to apply to more than one area.

Reno-Sparks contended that a 1991 EPA regulation "stat[ed] that the term 'rest of state' should be 'assumed' to constitute a single baseline area." (33) Specifically, the regulation states that "[w]ith respect to areas identified as 'Rest of State' it should be assumed that such reference comprises a single area designation for PSD baseline area purposes." (34) Although Reno-Sparks argued that this definition of "rest of state" should be applied to the "rest of state" designation for Nevada, the Ninth Circuit ruled that because the 1991 rule was not directed specifically at Nevada, did not purport to change the Nevada regulations, stated an assumption rather than a mandate, and contained no comment regarding its effect upon Nevada (implying that no one at EPA thought this definition of "rest of state" would be applied to Nevada), EPA was reasonable and not arbitrary or capricious in reaching its conclusion that the "rest of state" definition within the 1991 rule did not change the baseline areas in Nevada. Therefore, the Ninth Circuit concluded that Nevada's 1977 submission to EPA did propose the creation of 254 baseline areas, that EPA did adopt the baseline areas that Nevada had recommended, and that EPA had taken no regulatory action that would change the nature of these baseline area designations.

Part II of the Nevada Rule is titled "Clarification of the[particulate matter-10 micrometer (PM-10)] table" and discusses the controversy regarding the meaning of "rest of state" within the table, then states that "the term 'rest of state' refers to the hydrographic areas that had been approved by EPA as [total suspended particulate (TSP)] baseline areas in the State of Nevada." (35) In order to determine the validity of Part II of the 2002 Nevada Rule, the Ninth Circuit considered the regulatory history of PM-10. Originally the Clean Air Act required the measurement of TSP in the air; in 1993 this was changed to PM-10, which is a measure of particulate matter 10 micrometers or less in diameter. At that time EPA decided to use the same baseline areas for PM-10 as were already used for TSP. Although Reno-Sparks argued that a November 13, 2002 rule proposed to "'redesignate the current single unclassifiable area for [PM-10] into numerous individual areas to be consistent with area definitions for other pollutants,'" (36) the Ninth Circuit looked to the commentary surrounding the November 13 Rule. The court found that EPA responded to comments, stating that "'the State's 253 hydrographic areas had already been established as the PSD baseline areas for particulate matter.... Today's rule has no effect on the PSD baseline areas for PM-10 in the State." (37) Based on this comment, the Ninth Circuit concluded that the baseline areas in Nevada have always been divided in substantially the same way, and that there is not one large "rest of state" baseline area.

Finally, the Ninth Circuit ruled that EPA had not acted in violation of the APA by promulgating the 2002 Nevada Rule without allowing for notice and comment. Since the 2002 Nevada Rule clarified the existing law rather than changing existing law or creating new law, the court held the rule was "interpretive rather than legislative," and that the APA does not require notice or opportunity to comment before the enactment of interpretive rules. (38) Thus, the Ninth Circuit held that EPA's interpretation of the Clean Air Act in Parts I and II of the 2002 Nevada Rule was not arbitrary, capricious, or contrary to the law under the APA and therefore denied Reno-Sparks's petition for review of the 2002 Nevada Rule.

3. Sierra Club v. United States Environmental Protection Agency, 346 F.3d 955 (9th Cir. 2003), amended by 352 F.3d 1186 (9th Cir. 2003), cert. denied, 124 S. Ct. 2873 (2004).

The Sierra Club challenged the issuance of a final rule by the United States Environmental Protection Agency (EPA) which stated that nonattainment of National Ambient Air Quality Standards (NAAQS) for particulate matter (PM) in a planning area in California was a result of emissions from Mexico. In its rule, EPA decided that the planning area had attained NAAQS and labeled the area as in "attainment" under the Clean Air Act (CAA). (39) The Ninth Circuit agreed with the Sierra Club that EPA's decision was contrary to the scientific evidence EPA used to make its decision. The court found that further proceedings would not be useful and, as a result, vacated EPA's order and remanded the case to EPA with the instruction to reclassify the planning area as a "serious" nonattainment area.

Under the CAA, states are required to meet standards for levels of particulate matter. (40) One requirement is that the PM concentration in an attainment area cannot exceed 150 g/[m.sup.3] for more than one day per year (24-hour standard). (41) The other requirement is that the PM concentration cannot exceed a mean of 50 g/[m.sup.3] for the entire year (annual standard). (42) Areas that exceed the 24-hour standard for PM more than one day a year, or exceed the annual standard for the year, are classified as "nonattainment" areas. (43) Nonattainment areas are designated either "moderate" or "serious." (44) For moderate attainment areas, EPA gives the state a deadline by which it must meet the NAAQS. (45) If the state does not meet this deadline, the area is reclassified as serious (46) and the state must enact more stringent pollution controls. (47) However, if the state demonstrates that emissions from other countries are the source of the nonattainment, the area will not be reclassified as a nonattainment area. (48)

At issue in this challenge was the Imperial Valley Planning Area, an area of southeast California bordered by Mexico. EPA classified Imperial Valley as a moderate nonattainment area, and according to the CAA, California had until December 31, 1994 to comply with the PM NAAQS or be classified as a serious nonattainment area. (49)

When EPA failed to take action during the six years after the attainment date of December 31, 1994, Sierra Club sued EPA in the District Court for the District of Columbia to reclassify the Imperial Valley as a serious nonattainment area. In a consent decree, EPA agreed to make its Imperial Valley determination by October 9, 2001. On August 10, 2001, EPA gave notice that it intended to issue a rule that California had proven that Imperial Valley had exceeded the PM NAAQS only because of emissions from Mexico. This determination was based on wind direction and other sources of evidence. Sierra Club commented on the proposed rule and stated that the evidence cited by EPA did not prove California's contention, that California assumed but did not show causation between emissions from Mexico and CAA violations, and that California did not give reasons for exceeding the PM NAAQS after December 31, 1994. EPA rejected Sierra Club's comments and issued a final rule on October 19, 2001 that emissions from Mexico had caused the PM NAAQS exceedences in the Imperial Valley. Sierra Club petitioned the Ninth Circuit to review EPA's determination under the Administrative Procedure Act (APA). (50)

The court reviewed EPA's rule under the APA's arbitrary and capricious standard (51) to determine whether EPA could "articulate[] a rational connection between the facts found and the choice made." (52) Although the court gave deference to EPA's interpretation of technical information, it agreed with Sierra Club that EPA's evidence failed to show that emissions from Mexico caused the PM NAAQS to be exceeded. The court focused on wind data for two days in 1993 when the PM NAAQS were not met.

The court first addressed whether it had to find that emissions from Mexico caused the exceedances on either or both days to vacate EPA's finding. Because the air quality monitor sampled the air on every sixth day, the number of days the PM exceeded NAAQS was adjusted to account for this sampling rate. Therefore, if the court found that emissions from Mexico did not cause either of the two exceedances, the 24-hour standard was actually exceeded 4.3 days per year. If emissions from Mexico did not cause one of the exceedances, the total was actually 2.14 days per year. As a result, the court had to find that emissions from Mexico caused both exceedances to find that Imperial Valley complied with the CAA 24-hour standards.

For EPA's theory about the emissions to be true, winds on those days must have been blowing from Mexico into California, or from the south. EPA's evidence showed that winds on those days were predominantly from the northwest and only nominally from the south or southwest. The Ninth Circuit found that EPA's definition of southerly winds was "at the least, expansive and, at most, positively incorrect." (53) In addition, the southerly winds identified by EPA were from the west-southwest and did not show that the winds came from the area of Mexico that EPA claimed was the source of the emissions. The evidence did not prove EPA's theory that the emissions came from Mexico and, as a result, did not excuse Imperial Valley from NAAQS violations. The court decided that further proceedings would not be helpful because, based on EPA's evidence, emissions from Mexico could not have caused the PM exceedances. The Ninth Circuit granted Sierra Club's petition for review, vacated EPA's final rule, and remanded the case to EPA with instructions to label the Imperial Valley a serious nonattainment area.

B. Clean Water Act

1. Northern Plains Resource Council v. Fidelity Exploration and Development Co., 325 F.3d 1155 (9th Cir. 2003), cert. denied, 124 S. Ct. 434 (2003).

Northern Plains Resource Council (NPRC) appealed after the district court granted summary judgment to Fidelity Exploration and Development Company (Fidelity). NPRC brought a citizen suit under the Clean Water Act (CWA) (54) against Fidelity alleging illegal discharges into the navigable waters of the United States. The Ninth Circuit reversed the grant of summary judgment to Fidelity and remanded to the district court for entry of summary judgment in favor of NPRC.

Fidelity extracts coal bed methane gas from the Powder River Basin in Montana. The extraction process involves pumping large quantities of groundwater (coal bed methane groundwater, hereinafter CBM water)--groundwater that contains several pollutants listed by Environmental Protection Agency (EPA) regulations (55)--to the surface. CBM water is characterized by high concentrations of minerals, measurable quantities of metals such as arsenic and lead, as well as a Sodium Absorption Rate (SAR) 40 to 60 times greater than that of nearby surface waters.

In 1998, Fidelity contacted the Montana Department of Environmental Quality (MDEQ) about the possibility of discharging CBM water into the Tongue River and Squirrel Creek. MDEQ informed Fidelity by letter that there was no need to seek a Montana Pollution Discharge Elimination System (MPDES) permit. MDEQ cited an exemption in the Montana Code that allowed discharges of unaltered groundwater. (56) However, MDEQ also warned Fidelity that EPA did not agree with this permit exclusion because EPA believed the provision excluded discharges that might otherwise be covered by the CWA. Though Fidelity sought an MPDES permit in 1999 anyway, the company had already begun discharging unaltered CBM water into the Tongue River without a permit.

In 2000, NPRC sent a Notice of Intent to Sue to Fidelity, MDEQ, and EPA, alleging unpermitted discharges. The parties filed cross motions for summary judgment stipulating that out of the five elements necessary to prove a violation of the CWA (discharge, of a pollutant, from a point source, to a navigable water, without a permit), the only element at issue was whether the CBM water constituted a pollutant. The district court held that the CBM groundwater was not a pollutant under the CWA, and alternatively, even ff the groundwater was considered a pollutant, that Montana State law exempted Fidelity's discharges for permit requirements. The district court granted summary judgment in favor of Fidelity.

The Ninth Circuit reviewed the grant of summary judgment de novo. The court first addressed the issue of whether CBM water constitutes a "pollutant" under the CWA. Fidelity argued that because "unaltered groundwater" was not specifically listed, their groundwater did not constitute a "pollutant" for the purposes of the CWA. (57) The court rejected this argument based on the plain language of the statute. Referring to the dictionary definitions of both "industry" and "waste," the court found that CBM water falls into the category of industrial waste. (58) Industry is "the commercial production and sale of goods and services" and waste is defined as "any useless byproduct of a process." (59) Thus Fidelity's CBM water constituted "industrial waste" because Fidelity was in the business of producing methane gas for commercial purposes and because their production method created the byproduct of CBM water. As industrial waste, the court held that the CBM water was clearly a pollutant for the purposes of the CWA.

The Ninth Circuit gave two additional reasons for holding that Fidelity's CBM water was a pollutant under the CWA. First, Fidelity's CBM water was "produced water" under EPA regulations. These regulations define "produced water" as "water ... brought up from the hydrocarbon-bearing strata during the extraction of oil and gas." (60) The court determined that CBM water met this definition because it is pumped up from coal bed seams to extract methane gas. The court then held that the CWA only exempts produced water from permitting requirements where it is disposed of in a well and does not degrade other water bodies. (61) The court decided that Fidelity's discharge did not meet this exemption because it discharged directly into a navigable water rather than a state approved well.

Second, the Ninth Circuit held that the classification of the CBM water as a pollutant would be consistent with the CWA's definition of pollution--the manmade or man-induced alteration of the chemical, physical, biological, or radiological integrity of water." (62) The court referred to the CWA's antidegredation policy (63) and reasoned that allowing the exemption of "massive pumping of salty, industrial waste water into protected water ... to the detriment of farmers and ranchers" would contravene the purposes of the CWA. (64) Moreover, the Ninth Circuit repudiated the district court's holding--and Fidelity's arguments--that the discharges did not constitute a pollutant because the CBM water was unaltered. Specifically the Ninth Circuit addressed the reliance of both Fidelity and the district court on Association to Protect Hammersly, Eld, & Torten Inlets v. Taylor Resources, Inc. (APHETI) (65) for the proposition that any discharge of unaltered water would not qualify as a pollutant. The Ninth Circuit clarified that the holding in APHETI dealt only with the meaning of "biological materials." (66) The court explained that APHETI could not be read to require human transformation of every material before it would constitute a pollutant. The court held that the unaltered state of Fidelity's CBM water was inconsequential when the water itself contained contaminants.

The Ninth Circuit then considered whether Montana law exempted Fidelity's CBM water from the permit requirements under the CWA. Fidelity argued, and the district court agreed, that EPA had implicitly approved the CBM water exemption by authorizing the Montana program. The Ninth Circuit held that the CWA did not grant even EPA the authority to create exemptions for discharges "otherwise subject to the CWA." (67) Because EPA has no such exemption power, the court reasoned that EPA could not approve such an exemption through the state authorization process.

The court then examined the issue of whether Montana alone could create an exemption from the permit requirements of the CWA. The court held that Montana state law cannot impose restrictions on the CWA unless the statute clearly provides this authority; and the court did not find such a grant of authority in the CWA. (68) Moreover, the court held that the Supremacy Clause (69) precluded any serious argument that Montana state law could contradict or limit the scope of the CWA. Thus, the court held that the Montana exemption was invalid. The Ninth Circuit reversed the grant of summary judgment to Fidelity, and remanded for an entry of summary judgment for NPRC.

2. Environmental Defense Center, Inc. v. United States Environmental Protection Agency, 344 F.3d 832 (9th Cir. 2003), cert. denied, 124 S. Ct. 2811 (2004).

Environmental, industrial, and municipal groups challenged a final rule issued by the United States Environmental Protection Agency (EPA) under the Clean Water Act (CWA) (70) in three independent actions in three federal courts of appeals. The actions were consolidated and heard before a Ninth Circuit panel. After the panel issued its opinion, (71) petitioners requested rehearing en banc. The Ninth Circuit panel vacated its previous opinion, replaced it with this opinion, and denied the petition for rehearing with one judge dissenting.

The Texas Cities Coalition on Stormwater and the Texas Counties Stormwater Coalition (collectively municipal petitioners), the Environmental Defense Center and the Natural Resources Defense Council (collectively environmental petitioners), and the American Forest and Paper Association and the National Association of Home Builders (collectively industrial petitioners) challenged EPA's Phase II rule instructing certain small construction sites and small municipal storm sewer systems to comply with the requirements of the CWA's National Pollutant Discharge Elimination System (NPDES). (72) After considering the petitioners' 22 challenges, the Ninth Circuit remanded the rule to EPA to address three parts of the rule relating to issuing notices of Intent for general permits and a fourth part of the rule pertaining to forest roads. The court dismissed all other challenges to the rule.

Stormwater runoff is a major source of water pollution in the United States. Stormwater contains contaminants from industrial facilities, construction sites, and urban development, as well as from illicit discharges into sewer systems. The CWA requires any person who discharges pollutants from a "point source" into the nation's waters to obtain an NPDES permit. (73) Point sources include "any discernible, confined and discrete conveyance" such as a pipe, well, or vessel, and include storm sewers. (74) Congress amended the CWA in 1987 to regulate stormwater runoff pollution and require that any person conducting industrial activity and discharging stormwater into medium or large-sized municipal sewer systems obtain an NPDES permit. (75) This legislation was to be implemented in two phases: Phase I, promulgated in 1990, regulates large discharge sources, leaving to Phase II the regulation of sources of discharge not covered under Phase I. (76) EPA's Phase II Rule requires NPDES permits for discharges from small municipal separate storm sewer systems (MS4s) and from small construction sites--those between one and five acres in size. (77) A small MS4 can obtain a permit to discharge by submitting an individual management plan covering six specified categories, (78) by submitting a notice of intent that it will comply with a general permit that already exists, (79) or by seeking a permit that does not require the MS4 to regulate a third party. (80) Small construction sites can apply either for an individual permit or for coverage under an existing general permit. (81) When EPA issued its final Phase II rule in October 1999, various challenges from industries, municipalities, and environmental groups arose, culminating in this appeal.

The Ninth Circuit has jurisdiction to review EPA regulations under section 509 of the CWA. (82) The court began by evaluating the municipal petitioners' challenge that PA exceeded its statutory and constitutional authority by forcing small MS4s to regulate third parties in order to receive a permit under the Phase II Rule. The municipal petitioners first claimed that EPA exceeded its authority under the CWA because Congress did not explicitly include permitting as an element of the program to regulate small MS4s, and thus intended to exclude permitting from EPA's authorized duties. CWA section 402(p)(6) (83) of the CWA outlines EPA's duty to create a program to regulate the Phase II point sources. The Ninth Circuit stated that although permits were not listed in the statute, the language was nonexclusive and Congress's silence was more reasonably interpreted as giving EPA the flexibility not to use permits, rather than barring EPA from using permits, especially given the temporary moratorium on permits for Phase II dischargers also outlined in the statute. (84) The court also dismissed the municipal petitioners' argument that the structure of the CWA implies that permits are only required for large and medium MS4s. The court stated that the wording of CWA section 402(p)(3) (85) of the CWA could be interpreted as applying the permit requirement to all types of MS4s, and concluded that EPA did not exceed its statutory authority in requiring permits as part of the Phase II Rule.

The municipal petitioners also raised two constitutional challenges to the Phase II Rule. They first argued the rule violated the Tenth Amendment by requiring MS4s to regulate third parties. Under the Tenth Amendment, the federal government cannot compel states to implement federal regulatory programs, including compelling states to regulate third parties. The federal government can, however, "encourage [s]tates and municipalities to implement federal regulatory programs." (86) In this case, the Phase II Rule gives a small MS4 three choices by which it can obtain a permit: giving EPA a notice of intent that it will comply with an existing general permit, applying for an individual permit, or applying for an individualized permit under the program for large and medium-sized MS4s. The first two options require the MS4 to implement six "Minimum Measures," which include eliminating illicit discharges and reducing pollution from construction sites and development activities. (87) The municipal petitioners contended that these requirements unconstitutionally forced them to regulate third parties. However, the Ninth Circuit held that because MS4s could choose to apply for a permit under Phase I without implementing the Minimum Measures, the permit system did not "compel" the state and thus did not violate the Tenth Amendment. (88)

The Ninth Circuit also rejected the municipal petitioners' argument that the Phase II Rule violated the First Amendment (89) because one of the Minimum Measures required small MS4s to educate the community about the impacts of stormwater pollution on water bodies. (90) They claimed that EPA's regulation forced them to deliver messages they might not want to deliver. The Ninth Circuit characterized the permit requirements as a regulatory scheme, distinguishable from protected speech. Relying on three characteristics outlined in Glickman v. Wileman Brothers and Elliott, Inc., (91) the court held that the Phase II Rule did not violate the First Amendment. First, the court found that the Phase II Rule did not restrain the MS4s' freedom to communicate a message to an audience. In addition, the rule did not force the MS4s to endorse any political or ideological positions. Finally, while the regulation may require some type of speech, it did not compel the MS4s to engage in any particular speech.

The municipal petitioners' final argument was that EPA did not follow the notice and comment procedures of informal rule-making under the Administrative Procedure Act (APA). (92) The APA requires the agency give notice of a proposed rule, (93) which the court has interpreted to mean that a final rule be anticipated from reading the proposed rule. (94) The municipal petitioners claimed that the Phase II Rule was not a "logical outgrowth" of EPA's proposed rule because the proposed rule did not contain the alternative of obtaining a permit under the Phase I permitting scheme. (95) The Ninth Circuit held that the alternative permitting option contained elements that were all described within the proposed rule, and that the municipal petitioners had the opportunity to object to aspects of the Phase II Rule during the notice and comment period.

After reviewing the municipal petitioners' arguments, the court next turned its attention to the environmental petitioners' arguments. The environmental petitioners argued that the permit system allowed municipalities to obtain permits in a way that creates "an impermissible self-regulatory system" because it lacked proper agency and public oversight. (96) The Phase II Rule allowed dischargers to obtain permission to discharge under an existing general permit by filing a notice of intent (NOI) and addressing the Minimum Measures. (97) The NOIs, which are not reviewed by EPA prior to discharge, contain a pollution control program to "reduc[e] pollutants to the 'maximum extent practicable.'" (98) The environmental petitioners claimed that granting permits based on these unreviewed NOIs violated the CWA because EPA failed to assure that the dischargers are actually reducing pollution to "the maximum extent practicable." (99)

The court agreed with the environmental petitioners, finding that the Phase II Rule was contrary to congressional intent. The court applied the test from Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (100) to determine whether Congress's intent was unambiguously expressed in the CWA, and if that intent was not clear, whether EPA's interpretation of the CWA was reasonable. (101) The Ninth Circuit found that Congress's intent was clear in the language of the CWA and that EPA could not issue discharge permits unless the permits contained controls that would "reduce the discharge of pollutants to the maximum extent practicable." (102) The permits for small MS4s under the Phase II Rule did not contain these controls because there was no review to determine whether the measures a small MS4 implemented would actually reduce discharges appropriately. The Ninth Circuit rejected this portion of the Phase II Rule because it was in opposition to Congress's intent.

The court then addressed the environmental petitioners' argument that the Phase II Rule did not give the public notice or opportunity to be heard regarding the NOIs. The CWA requires that permit applications and permits issued under the NPDES permit system be available to the public (103) and that there must be a public hearing before permit approval. (104) The Ninth Circuit noted that Congress clearly required the CWA's public notice and hearing provisions to apply to NOIs because NOIs function as permit applications, subject to these requirements. The court then considered whether the NOIs were actually available to the public and found that they were not. Although one of the Minimum Measures addressed public participation, dischargers were only required to design a program that complies with state, tribal, and local constraints. The Ninth Circuit also found the existence of the Freedom of Information Act (105) was not enough to satisfy the public availability requirement because that Act only applies to documents in EPA's possession, not those in the possession of state, tribal, or local authorities. Likewise, the court found the availability of NOIs under state freedom of information acts insufficient to comply with the CWA because states varied in their public records laws. Holding that certain and uniform availability of NOIs under the Phase II Rule was lacking, the court vacated the part of the Phase II Rule applicable to issuing NOIs under the general permit option.

The environmental petitioners also challenged EPA's failure to designate particular industrial sources of stormwater pollution (Group A sources) and forest roads as major sources of stormwater pollution as arbitrary and capricious. The arbitrary and capricious standard (106) requires the agency to articulate "a rational connection between the facts found and the conclusions made." (107) When evaluating the possible targets of the Phase II Rule, EPA considered additional categories of dischargers other than small MS4s and construction sites. Group A facilities were not regulated under Phase I for administrative reasons, but were very similar to facilities that were regulated under Phase I. (108) The environmental petitioners claimed the Group A facilities should have been included under the Phase II Rule because their stormwater discharges are the same as facilities regulated in Phase I, and thus EPA's decision not to regulate those facilities was arbitrary and capricious. The court found that EPA had provided rational reasons for deciding not to regulate Group A facilities under Phase II but instead decided to allow local and regional authorities to regulate those dischargers. The court was "troubled" that EPA made this decision on an administrative basis, (100) but deferred to EPA's regulation because the CWA does not require EPA to regulate Group A sources under the Phase II Rule.

The Ninth Circuit next addressed the environmental petitioners' claim that EPA's decision not to regulate forest roads under the Phase II Rule was arbitrary and capricious. The petitioners claimed the decision was contrary to the evidence EPA had collected showing that forest roads are a serious source of erosion. EPA claimed that the Ninth Circuit did not have jurisdiction to consider this claim because the environmental petitioners' suit was not timely under the CWA, (110) and the environmental petitioners did not comment on this issue extensively enough during notice and comment to confer jurisdiction. (111) EPA pointed to the sivicultural regulations it established in 1976 that defined road runoff as nonpoint sources to support the agency's claim that the suit was untimely. The court, however, noted that the challenge was not to the 1976 regulations, but to the Phase II Rule, and that the challenge was timely. The court also found that the comments during the rulemaking period were substantive, giving the court jurisdiction, in addition to EPA's knowledge about the problem of forest road erosion when it conducted its rulemaking. The court remanded this issue to EPA to allow the agency to make a decision about the forest roads and provide support for its decision.

The court then turned to the industry petitioners' arguments. As a preliminary matter, the Ninth Circuit examined whether one of the petitioners, the American Forestry and Paper Association (AFPA), had standing to bring its claims. The court held that AFPA did not have standing because it could not prove that it had suffered a cognizable injury. Although AFPA demonstrated an interest in forest roads, EPA had not yet regulated those roads and thus AFPA had not been injured. The court proceeded to consider claims of the National Association of Home Builders, which did have standing.

The Ninth Circuit first addressed the industry petitioners' argument that the CWA required EPA to consult with states on the Phase II Rule, (112) and EPA had not done so. The industry petitioners claimed that, although EPA circulated drafts of the rule to the states, this action did not meet the consultation requirement for four reasons: 1) the drafts were circulated too far in advance of the rulemaking, 2) EPA based its rulemaking on information from sources other than the states, 3) the consultation should have gone beyond notice and comment because Congress intended to add extra requirements with the consultation requirement, and 4) consultation on the Phase II Rule after it was promulgated was ineffective. The court concluded that EPA did fulfill the consultation requirement because it submitted a draft of the first report on the rule to the states and other stakeholders and revised the Phase II Rule with the comments it received from that process. EPA also established a committee--comprised of representatives from the National Association of Home Builders, the states, industry groups, and environmental groups--which provided comments on the creation of the Phase II Rule. The court held that this exhibited substantial consultation and fulfilled the requirements of the CWA.

The court next addressed a series of challenges to the designation of small MS4s and construction sites subject to the Phase II Rule. The industry petitioners, joined by the municipal petitioners, argued that the EPA improperly designated small MS4s and construction sites for regulation under the Phase II Rule by basing its determination on factors other than those uncovered by the studies conducted pursuant to CWA section 402(p)(5). (113) The industry petitioners claimed that EPA based its decision on public comments received after a court invalidated the original size of construction sites covered in the Phase I Rule, as well as extra research discussed in the final Phase II Rule, both factors not derived from section 402(p)(5) studies. EPA countered that the CWA did not limit it to relying only on the section 402(p)(5) studies and that the agency reinforced those studies with other information. In analyzing this claim, the Ninth Circuit addressed the preliminary challenge to the standing of the industry petitioners raised by the Natural Resources Defense Council (NRDC). NRDC argued that the industry petitioners did not have standing because the petitioners could not prove that they would be regulated as a result of the procedural injury they claimed. The court held that while industry petitioners could not prove that they would have avoided regulation if EPA had followed the proper procedure, the potential of that outcome established procedural injury sufficient to give them standing. Turning to the merits of the industry petitioners' claim, the court then held that Congress did not intend to limit EPA to only the section 402(p)(5) studies, and affirmed the Phase II Rule on this claim.

The municipal petitioners also argued that EPA's decision to use the Census Bureau's definitions of urbanized areas to designate small MS4s for regulation under the Phase II Rule was arbitrary and capricious. The petitioners claimed that EPA did not demonstrate a quantified basis for its choice and that the agency did not have evidence that urbanized areas, which are areas of high population density, should be regulated under the Phase II Rule. The agency's decision was based on a record showing a connection between urban stormwater runoff and water pollution. The court found that absolute accuracy about the population of an area regulated under Phase II was not necessary. The court treated EPA's decision with "great deference" because it was based on a technical analysis, and held that the agency's decision was proper. (114)

The industry and municipal petitioners both argued that EPA's application of the Phase II Rule to construction sites between one and five acres was arbitrary and capricious. In an earlier case, the Ninth Circuit remanded EPA's decision to regulate construction sites of at least five acres. (115) The petitioners claimed that the new Phase II Rule definition was a reaction to the earlier remand decision and was not supported by scientific data. The petitioners claimed that the uncompromising inclusion of all small construction sites was arbitrary because EPA did not take the frequency of harmful impacts into account, consider that the harm small construction sites cause is in the aggregate, or address the wide variation in impact from construction sites. EPA countered that the evidence unequivocally showed that small construction sites have negative impacts on water quality and defended its use of studies on large construction sites to extrapolate to small construction sites. The Ninth Circuit applied the substantial evidence standard to determine whether EPA showed enough evidence that a reasonable person could accept the evidence as supporting EPA's conclusion. The court found EPA's explanations for its decision consistent with the evidence and held that the decision was not arbitrary or capricious.

The court then considered the industry petitioners' argument that EPA impermissibly supplemented the permit regulations by allowing waivers for small construction sites that are unlikely to have negative impacts on water quality. The petitioners claimed that this program shifted the burden to operators of construction sites to prove they will not negatively impact water quality, and that this shift was unreasonable given that EPA had not established that specific sites would have negative impacts. The court reviewed this claim under the arbitrary and capricious standard and found the waiver system reasonable.

The court likewise held that EPA's decision to regulate all small construction sites was reasonable. The industry petitioners claimed that EPA's regulation of all small construction sites was impermissible because the agency had declined to regulate other potential sources of stormwater discharge due to insufficient information on them, but then decided to regulate small construction sites based on no more information than it had for other sources. The petitioners argued that this decision was arbitrary and capricious because EPA used a different standard for regulating construction sites than it did for other sources. Again the court deferred to EPA's decision, noting that the industry petitioners had no evidence that pollution from sources EPA decided not to regulate was similar to pollution from small construction sites.

The court next addressed a challenge to EPA's authority to add new sources of pollution to Phase II regulation in the future. The industry petitioners objected to EPA's ability to retain authority to regulate stormwater dischargers not regulated under the Phase II Rule in the future, (116) claiming that CWA section 402(p)(6) of the CWA did not authorize a case-by-case determination of regulatory authority or allow EPA to have continuing authority to regulate new sources. Furthermore, petitioners noted that the Phase II Rule allows EPA to add future designations without consulting with states and without reliance on the section 402(p)(5) studies. The court accorded Chevron deference to EPA's decision, finding that section 402(p)(6) broadly authorizes EPA to protect against water pollution and that section 402(p)(2)(5) allows EPA to conduct a case-by-case analysis of polluters. The court found that the plain language of the statute supports EPA's interpretation because section 402(p)(2)(5) states that EPA has continuing authority to designate dischargers to regulate. The court also found the industry petitioners' claim was not ripe because EPA had not yet designated a source under this authority.

Industry petitioners alternatively argued that EPA's retention of future designation authority violates the nondelegation doctrine. The petitioners argued that if the CWA did actually authorize EPA to regulate dischargers in the future, then Congress unconstitutionally gave EPA its legislative power. The petitioners relied on American Trucking Ass'ns v. United States Environmental Protection Agency (American True/ring) (117) where the D.C. Circuit held an EPA regulation invalid because although EPA had a reasonable basis for establishing the standards it did, had "articulated no 'intelligible principle' to channel its application of these factors," therefore violating the nondelegation doctrine. (118) The Ninth Circuit held that the industry petitioners' argument failed because American Trucking was reversed by the Supreme Court in Whitman v. American Trucking Ass'ns. (119) The Supreme Court rejected the concept that an agency can make a statute a constitutional delegation through its interpretation. Therefore, the question is not whether EPA unconstitutionally interpreted the relevant portion of the CWA, but whether section 402(p)(2)(5) itself is unconstitutional. Even though the industry petitioners did not raise this question of constitutionality, the court held that the CWA is a constitutional delegation.

Industry petitioners then argued that the retained authority violated the APA, claiming that EPA did not provide the notice required of it before promulgating the rule. (120) The petitioners point to the discrepancy between the proposed rule, which would have allowed EPA to designate targets of regulation on a case-by-case basis where the discharge played a role in a violation, and the final rule, which allowed EPA to designate targets of regulation on a case-by-case basis where "the discharge, or category of discharges within a geographic area" played a role in a violation. (121) The court again applied the logical outgrowth standard and determined that EPA gave notice that it was considering future designations based on geographic area and the petitioners had an opportunity to comment on this.

Finally, the court addressed the industry petitioners' argument that EPA failed to fulfill the requirements of the Regulatory Flexibility Act (RFA). (122) The RFA compels federal agencies to conduct an analysis of the effects a proposed rule would have on small business entities, unless the rule will not have "a significant economic impact on a substantial number of small entities." (123) The agency must have a factual basis for claiming that the rule will not have this effect. EPA made that claim in this case but voluntarily complied with the RFA. The industry petitioners claimed the Phase II Rule would result in significant costs and EPA failed to consider the effect of the rule on all small entities affected. EPA and intervenor NRDC argued that the industry petitioners considered the total costs of the rule, not only the costs small entities would bear, and that EPA only had to comply with the RFA if it found that the Phase II Rule would affect a substantial number of small entities. The Ninth Circuit agreed with EPA and held that it was not required to conduct an analysis under the RFA. The court also stated that even if EPA was required to the conduct the analysis, it substantially assessed the rule's impacts on small entities. Any noncompliance with the RFA would have been harmless error.

In summary, the Ninth Circuit remanded four aspects of the Phase II Rule to EPA: 1) EPA's failure to make review of NOIs mandatory under the general permit option, 2) EPA's failure to make the NOIs public, 3) EPA's failure to subject NOIs to public hearing, and 4) EPA's failure to include forest roads in the Phase II Rule. The court dismissed the petitioners' other arguments.

Judge Tallman concurred with the majority's opinion with the exception of the court's decisions that the general permit system of the Phase II Rule was arbitrary and capricious. Judge Tallman viewed EPA's general permit system with NOIs as a reasonable interpretation of its authority under the CWA. He first determined that the CWA does not clearly show Congress's intent regarding a general permit system or how to treat NOIs. In light of unclear congressional intent, he argued, the court should defer to EPA's expertise on the subject. Judge Tallman pointed out that a general permit system had been approved by the D.C. Circuit and, if the general permit system was allowed, the public hearings for NOIs were not necessary. Under the general permit system, EPA is not required to review every NOI because the general permit is the source of the dischargers' obligations. Judge Tallman objected to the majority's failure to defer to EPA's decision and claimed that the court was making policy rather than ruling on a dispute.

C. National Environmental Policy Act

1. Citizens for Better Forestry v. United States Department of Agriculture, 341F.3d 961 (9th Cir. 2003), infra Part II. C.

2. Forest Guardians v. United States Forest Service, 329 F.3d 1089 (9th Cir. 2003), infra Part II. C.

3. Friends of Yosemite Valley v. Norton, 348 F.3d 789 (9th Cir. 2003), clarified by 366 F.3d 731 (9th Cir. 2004), infra Part II.E.

4. Laub v. United States Department of the Interior, 342 F.3d 1080 (9th Cir. 2003).

Laub, two other farmers, United States, and the California Farm Bureau Federation (collectively Plaintiffs) sued the Department of the Interior, other federal agencies and individuals in their capacities as officers of federal agencies (collectively federal defendants), and California state agencies and individuals in their capacities as officers of California state agencies (collectively state defendants) under the National Environmental Policy Act (NEPA), (124) challenging an environmental impact statement (EIS) for water use in the California Bay-Delta area. The Ninth Circuit held that, even though the site in question had not yet been developed, plaintiffs' claim was ripe, and that further discovery was necessary on the issue of whether the state's participation was independent of federal control and therefore not governed by NEPA.

The CALFED Bay-Delta program (CALFED), operated by multiple state and federal governmental entities, oversaw management and regulation of the San Francisco Bay/Sacramento-San Joaquin Delta estuary. In 1995 and 1996, the agencies agreed that CALFED would prepare an assessment of environmental impact that would satisfy both the EIS requirement of NEPA and the environmental impacts report (EIR) requirement of the California Environmental Quality Act (CEQA). (125) In July 2000, CALFED issued an EIS/EIR which offered a "Preferred Program Alternative which, among other actions, would convert agricultural lands to other uses, including habitat, levee improvements, and water storage." (126) A Record of Decision (ROD), issued in August 2000, certified the EIS/EIR. The ROD included agreements entered into by the state and federal governments in order to manage water in the California Bay-Delta.

Plaintiffs alleged that defendants violated NEPA and CEQA in three ways: first, by not considering any reasonable alternatives to the project; second, by not considering the direct, indirect and cumulative impacts of the project; and finally, by not fully analyzing mitigation options. The district court dismissed plaintiffs' CEQA claims based on the Eleventh Amendment; plaintiffs did not appeal this decision. The district court then dismissed without prejudice plaintiffs' NEPA complaint on three bases: 1) plaintiffs' claim was not ripe against the federal agencies because they were not challenging a final agency action, 2) the court did not have subject matter jurisdiction over the NEPA claim against the state defendants because it was not a federal action, and 3) further discovery or briefing was not necessary to determine the amount of federal involvement. On appeal, the Ninth Circuit addressed these three issues as well as plaintiffs' standing, which the federal defendants had raised for the first time. The Ninth Circuit properly considered standing on appeal because standing implicates jurisdiction.

In order to have standing under Lvjan v. Defenders of Wildlife (Lvjan), (127) plaintiffs must have a concrete, particularized, and actual or imminent injury-in-fact that is causally connected to the action, and must be redressable. The Ninth Circuit determined that Plaintiffs in this case had standing because they fulfilled the injury requirement of Lujan and the relaxed causation and redressability requirements of procedural standing cases. Plaintiffs satisfied the injury requirement by alleging individualized injury in their complaint. Plaintiffs satisfied the relaxed causation requirement by alleging injury (water shortage on the west side of the San Joaquin Valley leading to west-side users considering east-side water sources such as those belonging to the individual plaintiffs) that was a direct result of the implementation of CALFED. Plaintiffs did not have to show redressabillty or immediacy because plaintiffs alleged a procedural injury which, if unremedied, would affect a separate interest of the plaintiffs--a challenge which invoked procedural standing and its more relaxed requirements.

The Ninth Circuit next determined that plaintiffs' claims were ripe because, even though the agency action had not yet occurred, "the question of whether an agency has complied with NEPA's procedural requirements in formulating a programmatic EIS is immediately ripe for review before any site-specific action is taken." (128) The Ninth Circuit referred to Idaho Conservation League v. Mumma, (129) in which the Ninth Circuit found that a challenge to an EIS was ripe before the agency action was final because if the federal agency action was not challenged until after its completion there would be very few, if any, remedies available to the plaintiffs. In Mumma, the process of the environmental impact analysis was tiered, meaning that once an issue was addressed it would not be fully analyzed in subsequent analyses--instead subsequent analyses referred back to the original document addressing the issue. Therefore, one site-specific statement, such as the Preferred Program Alternative in this case, would "determine the scope of future site-specific proposals." (130)

The Ninth Circuit also referred to Salmon River Concerned Citizens v. Robertson (Salmon River), (131) in which it held that an agency action was reviewable before it had commenced, in support of the finding that plaintiffs' claim was ripe. The Ninth Circuit rejected the district court's reliance on Ohio Forestry Ass'n v. Sierra Club (Ohio Forestry)1a2 because, after the decision in Ohio Forestry, the Ninth Circuit distinguished substantive challenges from procedural challenges, and determined that procedural challenges under NEPA are ripe once a programmatic EIS has been issued. Similarly, the Ninth Circuit rejected the federal defendants' reliance on Rapid Transit Advocates, Inc. v. Southern California Rapid Transit District (Rapid Transit) (133) because "in Rapid Transit there was no tiering between the two stages of the program. Thus, funding approval at stage one did not commit the agency to design approval at stage two." (134) In contrast, tiering occurred between the multiple stages of the program in Laub, and the ROD was the agency's final decision with respect to NEPA and CEQA. This closer relationship between the stages made Laub distinguishable from Rapid Transit and allowed the claim in Laub to be ripe as opposed to the unripe claim in Rapid Transit The Ninth Circuit reversed the district court and found that plaintiffs' claims were ripe.

Finally, the court addressed plaintiffs' challenge to state land and water acquisitions under NEPA. In a related challenge, plaintiffs also argued that the district court wrongly decided to disallow discovery on the issue of whether the state defendants were subject to NEPA. To enjoin the state defendants for a claim under NEPA, plaintiffs had to show that the state and federal projects were so intertwined as to be considered a single federal action. The Ninth Circuit analyzed whether a claim constituted a federal action on a case-by-case, fact-specific basis. (135) However, the Ninth Circuit found the district court dismissed the claim once it determined that the federal government had an advisory role without analyzing the facts and determining whether CALFED constituted a federal action, the Ninth Circuit remanded this issue to the district court. The state defendants claimed that their actions were independent of CALFED, and so they were not subject to NEPA. The standard of review for challenges to denial of discovery is actual and substantial prejudice. To succeed, the party challenging the discovery ruling must show that there would be a reasonable probability that, with discovery, the outcome of the case would have been different. The Ninth Circuit found that there was a reasonable probability that, had more discovery been allowed, the outcome on this issue would have been different. The Ninth Circuit therefore reversed the district court on the discovery issue.

The Ninth Circuit reversed the district court on the issues of ripeness and remanded the case to the district court for further discovery regarding the level of federal involvement in CALFED.

5. Bell v. Bonneville Power Administration, 340 F.3d 945 (9th Cir. 2003).

The Utility Reform Project and three of its members (collectively Bell) petitioned for Ninth Circuit review of amendments to power sale contracts between Bonneville Power Administration (BPA) and several direct service industries (DSIs). The Ninth Circuit denied Bell's petitions for review.

BPA is a federal agency authorized to market virtually all of the power generated by federal power facilities in the Pacific Northwest. (136) BPA entered into contracts with DSIs, industrial companies that require a great deal of electricity to operate, to sell power at a designated rate. An energy crisis began after these contracts were made, creating a low power supply as well as high energy prices for BPA, which buys power in the spot market. The original contracts did not give BPA the power to restrict the amount of power it sold to the DSIs and, as a result of the energy crisis, BPA was contractually obligated to buy power at high prices and sell it at lower prices to the DSIs. As one way of dealing with this crisis, BPA paid the DSIs to amend the original contracts to excuse BPA from the original contract obligations to supply the DSIs with power at the lower contract rate. Bell challenged these contract amendments on five grounds.

The court had jurisdiction over Bell's petition pursuant to the Pacific Northwest Electric Power Planning and Conservation Act (Northwest Power Act), (137) and, although one of the contract amendments had been performed, Bell's challenge was not moot because it was capable of repetition but evading review. The court found that it lacked jurisdiction to review one of the amendments because Bell did not petition the court to review that amendment within the ninety-day window that the Northwest Power Act allows after execution of the amendments. (138) The Ninth Circuit analyzed BPA's decision according to the "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law" standard, (138) as directed by the Bonneville Project Act. (140)

Bell first argued that BPA exceeded its statutory authority by amending the contracts. The court found that the amendments were within BPA's authority, because the administrator of BPA has broad statutory authority to amend contracts "upon such terms and conditions and in such manner as he may deem necessary." (141)

The court next addressed Bell's argument that BPA's decision to amend the contracts was arbitrary and capricious because the DSIs would have reduced their power use even without the contract amendments. The court, deferring to BPA's discretion, stated that it would not second-guess the agency's "winning business decisions," especially in light of the unusual market conditions that would have caused financial ruin if BPA fulfilled the terms of the original contract. (142) Thus, the Ninth Circuit held that BPA's decision was not arbitrary or capricious.

Third, the court discussed Bell's argument that the contract amendments unlawfully created a power discount, in contravention of the Northwest Power Act. (143) The administrator of BPA is required to follow specific procedures, including publishing the proposed rates in the Federal Register and holding at least one hearing, before establishing a power rate. (144) Bell claimed that the amendments constituted a rate change because they resulted in discounts to the DSIs since the money paid to the DSIs for the amendments was "inextricably linked" to the original rate. (145) The Ninth Circuit did not discuss the validity of Bell's "inextricably linked" theory because it held that the original contracts' ratemaking provisions were not linked to the amendments for three reasons: 1) the amendments were separate in time from the original contracts, 2) the amendments occurred in dramatically different power market environments from the original contracts, and 3) the amendments had separate consideration from the original contracts. For the amendment to truly be considered a discount of the original contract, BPA would have to get little or no additional consideration for the money it paid to the DSIs. But in this case, BPA received valuable consideration in the form of curtailed power. The court relied on its rationale in Association of Public Agency Customers v. Bonneville Power Administration (APAC), (146) where DSIs paid BPA to reduce their power purchases from BPA. In that case, the Ninth Circuit held that the fee was not for the sale of power, and therefore was not a rate. (147) Based on that reasoning, the court found that the current contract amendments also were not rates subject to ratemaking procedures.

Bell also argued that one of BPA's amended contracts violated the resource acquisition provisions of the Northwest Power Act because the amended contract included a provision whereby BPA made plans to facilitate new wind resources. (148) The Ninth Circuit did not address the substance of Bell's argument because it held that the claim was not ripe for review. The contract in question merely provided for future negotiations over a resource. Because BPA had not acquired a resource, the resource acquisition provisions did not apply and the Ninth Circuit dismissed the argument.

Finally, the court discussed Bell's argument that BPA violated the National Environmental Policy Act (NEPA) (149) by not conducting an environmental analysis or an environmental impact statement prior to amending the contracts. The Ninth Circuit did not address this argument because it found that Bell did not have standing to bring this claim. A claimant under NEPA must establish an injury in fact, causation, and redressability in order to have standing to sue. (150) Bell failed to demonstrate the element of causation because he did not show that his enjoyment of the land would be lessened if BPA did not complete an environmental analysis. Bell's claims that the DSIs would have gone out of business, therefore avoiding environmental injury, and that the amendments drained funds that BPA should have used for environmental efforts were not supported by facts and did not prove causation. Bell also attempted to rely on APAC, where the Ninth Circuit found that the plaintiffs had standing. The Ninth Circuit rejected the argument because the standing decision in APAC was not precedential and the type of amendments at issue in this case were not at issue in APAC. The Ninth Circuit denied all of Bell's petitions for review.

6. Selkirk Conservation Alliance v. Forsgren, 336F.3d 944 (9th Cir. 2003).

Selkirk Conservation Alliance, Sierra Club, Kettle Range Conservation Group, Idaho Conservation League, and Pend Oreille Environmental Team (collectively Selkirk) brought action against Harv Forsgren in his official capacity as Regional Forester of the Pacific Northwest region, other United States Forest Service (USFS) and United States Fish and Wildlife Service (FWS) officials, and Stimson Lumber Company (collectively Stimson), alleging that USFS and FWS violated the Endangered Species Act (ESA) (151) and the National Environmental Policy Act (NEPA) (152) by granting a road-building easement (Stimson project) through the Colville National Forest. The district court granted summary judgment in favor of USFS and FWS, and Selkirk appealed. The Ninth Circuit reviewed the actions of USFS and FWS under the Administrative Procedure Act (APA), (153) found that the agencies did not act in an arbitrary and capricious manner in approving the Stimson project, and affirmed the district court's summary judgment in favor of Stimson.

Stimson Lumber Company owns six plots of land within the Colville National Forest, five of which are completely surrounded by the National Forest. The remaining plot is logically accessible only through national forest land. Stimson sought an easement from USFS under 16 U.S.C. section 3210(a) (154) to build roads into the area to facilitate a logging operation. The Stimson project was located in an area of critical habitat for area grizzly bear (Ursus arctos horribilis), which are listed as threatened under the ESA. Once the parties discerned that there was a listed species in the proposed development area, USFS followed the consultation requirement of the ESA by consulting with FWS, and FWS issued a draft biological opinion that indicated that the Stimson project would jeopardize area grizzly bear. FWS put the biological opinion on hold while Stimson's predecessor in interest began working with USFS and FWS to create an agreement that would allow the development by incorporating measures designed to protect the endangered species in the area. In 1997, after two years of meetings and research, the agencies and Stimson entered into the conservation agreement. FWS released its final biological opinion after the 1997 conservation agreement was reached; this opinion indicated the proposed action would not jeopardize the grizzly bears in the area. Selkirk issued five challenges to the agencies' decision to grant the easement under the ESA and NEPA. Selkirk argued that the reliance of both agencies on the conservation agreement as a sufficient mitigation measure violated the ESA, and challenged the 2001 Biological Opinion for failure to consider reasonably foreseeable activities. Under NEPA, Selkirk challenged the geographical scope, temporal scope, and the cumulative impact analysis of the environmental impact statement (EIS).

The ESA requires agencies to use the "best scientific and commercial data available" in evaluating whether a government action will jeopardize endangered species. (155) The Ninth Circuit found that FWS and USFS properly followed the ESA in relying on the conservation agreement as a mitigation measure. The Ninth Circuit cited Friends of Endangered Species, Inc. v. Jantzen (156) and Edwardsen v. United States Department of the Interior (157) for the principle that agencies may act in compliance with environmental laws even if they rely on private agreements as mitigation measures. Selkirk, argued that even if FWS could consider the conservation agreement, it failed its duty to rely on the best science by finding the agreement mitigated adverse effects on grizzly bear. The Ninth Circuit noted that the agencies conducted meetings, did research, consulted with each other and with the developer, and considered mitigation. The Ninth Circuit concluded that the agencies' reliance on the conservation agreement as the best available scientific data was valid because the agencies "conducted a reasonable evaluation of the relevant information and reached a conclusion that, although disputable, was not 'arbitrary and capricious.'" (158)

The Ninth Circuit also held that FWS did not violate the ESA in issuing its 2001 biological opinion. Selkirk challenged this biological opinion as inadequate because it relied on the conservation agreement for consideration of cumulative effects and did not consider future activities that Stimson might undertake. The Ninth Circuit again deferred to the agency expertise of FWS. In its biological opinion, FWS addressed mitigation measures in the conservation agreement and incorporated that agreement as part of the Stimson project. Determining that the ESA does not require the agency to use a particular means of assessing cumulative impacts, the Ninth Circuit held that FWS did not act in an arbitrary and capricious manner by using the conservation agreement as the best scientific and commercial data available.

The Ninth Circuit next addressed Selkirk's three challenges to the EIS and decided that USFS properly followed NEPA in issuing the EIS for the Stimson project. NEPA requires agencies to submit an EIS before taking "major federal action" that "significantly [affects] the quality of the human environment." (159) Selkirk challenged the EIS as inadequate for 1) failing to adequately consider cumulative impacts because the physical area which the EIS analyzed left out adjacent projects by Stimson in the Idaho Panhandle National Forest (IPNF) and other areas, 2) failing to consider possible future logging activity by Stimson, and 3) adopting the shortest temporal scope of the EIS which had been identified as sub-optimal by USFS scientists.

In considering geographical scope of the EIS, the Ninth Circuit cited Kleppe v. Sierra Club (160) for the premise that the court must defer to agency judgment, but noted that Kern v. United States Bureau of Land Management (161) requires the agency to "'consider cumulative impacts in determining the scope of an EIS.'" (162) Thus the court could not blindly defer to the agency, but instead must analyze whether the agency considered cumulative impacts when deciding what geographic area the EIS will encompass. The Ninth Circuit concluded that, under the rule of Kleppe and Kern, USFS adequately considered cumulative impacts because USFS rationally explained its decision to exclude the IPNF from the scope of assessment. While it initially considered using a larger area including the IPNF for the EIS, USFS determined that using such a large area for the analysis might artificially minimize the predicted impact of the Stimson project, and thus chose the smaller geographical scope. The Ninth Circuit distinguished Selkirk's cumulative impacts argument from two recent Ninth Circuit cases in which the court decided that USFS had erred in its choice of geographic area for analysis, Native Ecosystems Council v. Dombeck (Native Ecosystems) (163) and Idaho Sporting Congress v. Rittenhouse (ISC). (164) The Ninth Circuit held that Selkirk was distinguishable from Native Ecosystems and ISC because in Selkirk USFS "did 'provide support for' and 'justify' its decision" regarding the choice of geographic area, which USFS had not done in either Native Ecosystem or ISC. (165) For example, in Native Ecosystems, the Ninth Circuit held that USFS should have considered a nearby sheep grazing area that was also an area where many grizzly bear died when setting the scope of its EIS. The Ninth Circuit contrasted this "population sink" with the IPNF in Selkirk on the basis that the IPNF was not known as a place where grizzly bear tend to die and thus was substantially different from the population sink in Native Ecosystems.

The Ninth Circuit next addressed Selkirk's concern that USFS failed to contemplate the impact of future Stimson activities in the EIS and determined that reliance on Stimson's compliance with the conservation agreement made analysis of every possible future operation unnecessary. Selkirk argued that the EIS failed to include all of Stimson's planned development concerning forest practices applications. The Ninth Circuit noted that the EIS presumed perpetual logging on all Stimson land and included analyses of most pending forest practice applications along with the effects of the conservation agreement. Because USFS had exhaustively considered the effects of the conservation agreement and had considered most of Selkirk's planned development, the Ninth Circuit did not require it to "list, map, and discuss every pending Stimson harvest plan." (166) The court held that what USFS had considered for purposes of the EIS constituted a reasonable evaluation of foreseeable consequences.

Finally, the Ninth Circuit addressed Selkirk's concern about the temporal scope of the EIS. After considering a three, five, and ten year scope, USFS chose a three year scope for the EIS. The court held this decision was not arbitrary or capricious because it was rationally based on the fluctuating nature of the Washington State forest management rules at the time the EIS was drafted. Although the court found that the temporal scope for the EIS was a hard choice, it deferred to the not unreasonable decision of USFS, the expert agency in this field.

In closing, the Ninth Circuit noted that environmental statutes such as the ESA and NEPA create a balance between preservation of the environment and protection of private property by delineating specific requirements for federal agency action and concluded that USFS and FWS complied with these requirements. The Ninth Circuit noted it had faith in the enforcement of the conservation agreement and affirmed the district court's grant of summary judgment against Selkirk.

7. Center for Biological Diversity v. United States Forest Service, 349 F.3d 1157 (9th Cir. 2003).

The Center for Biological Diversity and the Sierra Club (collectively the Center) alleged that the final environmental impact statement (EIS) of the United States Forest Service (USFS) was in violation of the National Environmental Policy Act (NEPA) (167) and NEPA's implementing regulations because the EIS improperly concluded that the northern goshawk (Accipiter gentilis) was a habitat generalist. The district court granted summary judgment to USFS. The Ninth Circuit reversed the district court's grant of summary judgment and remanded to the district court, directing the district court to remand the final EIS to USFS.

USFS created the Northern Goshawk Scientific Committee (the Committee) to review the habitat management needs of the northern goshawk in the Southwestern Region of the United States in response to concerns about impact from logging. The Committee published a report entitled Management Recommendations for the Northern Goshawk in the Southwestern United States (MNRG), which stated the goshawk was a habitat generalist, meaning it can survive in different types of forest and does not need a particular type of forest in order to survive. USFS then published notice of its intent to prepare an EIS for the Southwestern Region in order to incorporate management of the northern goshawk into forest and land management in the area, and received comments challenging the finding that the goshawk was a habitat generalist. Both the Arizona Game and Fish Department (AGFD) and the United States Fish and Wildlife Service (FWS) submitted comments, including scientific information that directly controverted the MNRG's conclusion that the northern goshawk was a habitat generalist. USFS responded to AGFD and FWS in letters, citing studies showing the northern goshawk to occupy many different types of forests. USFS created a Goshawk Interagency Implementation Team to analyze the findings and recommendations of the MNRG and to propose revisions to the recommendations.

In 1994, USFS issued a draft EIS with five different alternatives. This draft EIS noted that the recommendations of the MNRG were included in all five alternatives, and therefore each alternative encompassed the best scientific data available. The draft EIS summarized the comments that USFS had received, but did not specifically address the comments that argued that the northern goshawk was not a habitat generalist. After issuing the draft EIS, USFS accepted more comments. Citing various scientific studies, AGFD, the New Mexico Department of Game and Fish, a wildlife biologist working for USFS who had published research on the northern goshawk, and the Center for Biological Diversity renewed the challenge to USFS's determination that the northern goshawk was a habitat generalist. The state agencies noted that they were renewing this challenge because the issue had not been sufficiently addressed in the draft EIS.

USFS's final EIS included minor changes from the draft EIS, added a sixth alternative to respond to the Mexican Spotted Owl Recovery Plan, and included a section that contained and responded to the comments that USFS had received on the draft EIS, but again did not address the comments challenging its conclusion that the northern goshawk was a habitat generalist.

The Center challenged the final EIS on three grounds: 1) inadequate analysis of the controversy over whether the northern goshawk was a habitat generalist, 2) failure to discuss scientific studies with results contrary to USFS's finding that the northern goshawk was a habitat generalist, and 3) failure to respond to comments on the scientific debate over whether the northern goshawk is a habitat specialist or a habitat generalist. The Ninth Circuit reviewed the district court's grant of summary judgment de novo, and USFS's compliance with NEPA under the Administrative Procedure Act (APA) (168) standard requiring that agency actions be set aside if prescribed legal procedures are not followed. In Kern v. United States Bureau of Land Management, (169) the Ninth Circuit adopted a rule of reason standard to analyze the adequacy and thoroughness of the discussion of environmental consequences in the EIS.

The Ninth Circuit held that USFS violated NEPA because it did not consider or address the scientific evidence that the northern goshawk was not a habitat generalist. The Ninth Circuit noted that NEPA required the agency to consider all the important aspects of a proposed action that would have an effect on the environment and inform the public that it has carried out this analysis. Although NEPA does not require USFS to make a particular decision, it does require USFS to address all the available scientific information. In addition, one of NEPA's implementing regulations, 40 C.F.R. section 1502.9(b), requires USFS to "disclose and discuss responsible opposing viewpoints." (170) The Ninth Circuit held that, since USFS did not discuss in its final EIS the scientific viewpoint that the northern goshawk was a habitat specialist, it violated 40 C.F.R. section 1502.9(b): "IT]he Final EIS fail[ed] to disclose and discuss responsible opposing scientific viewpoints in the final statement itself in violation of NEPA and the implementing regulations." (171) The Ninth Circuit rejected USFS's argument that its summary comment stating that opposing views existed sufficiently addressed the debate over whether the northern goshawk was a habitat generalist. The Ninth Circuit also rejected USFS's argument that the habitat genera]Jut controversy was sufficiently addressed by documents in the record, and noted that NEPA and its accompanying regulations required "the agency [to] disclose responsible opposing scientific opinion and indicate its response in the text of the final statement itself." (172)

The Ninth Circuit remanded the case to the district court, and directed the district court to remand the final EIS to USFS.

D. Resource Conservation and Recovery Act

1. Kasza v. Whitman, 325 F.3d 1178 (9th Cir. 2003).

Former employees of a classified Air Force facility brought an action against the Air Force and the United States Environmental Protection Agency (EPA), alleging violations of the Resource Conservation and Recovery Act (RCRA). (173) The district court granted summary judgment for the Air Force, found the action against EPA moot, and granted the employees' motion for attorney fees. Kasza and Frost (collectively employees) appealed, and EPA cross-appealed. The Ninth Circuit affirmed in part, reversed in part, and remanded. On remand in both Kasza v. Whitman and Frost v. Rumsfeld the district court unsealed a court transcript after approving redaction of parts of the transcript. On remand in Frost v. Rumsfeld the district court denied the employees' motions for attorney fees. The employees appealed the redaction of the transcript and the denial of attorney fees. The Ninth Circuit affirmed the district court's actions in redacting the transcript and denying attorney fees.

This case started as two separate suits. In Kasza v. Browner, (174) Kasza brought a citizen suit under RCRA against EPA alleging the agency had failed to carry out its nondiscretionary duties of inspection, inventory, and public disclosure and seeking declaratory and injunctive relief. (175) In Frost v. Perry, (176) Frost (the widow of a former employee) and other employees brought a citizen suit against the Air Force under RCRA alleging the Air Force violated numerous provisions of RCRA related to reporting, inventory, and disposal of hazardous waste and seeking declaratory and injunctive relief. (177) The appeals from Kasza and Frost were combined.

The Ninth Circuit affirmed the denial of attorney fees because the party asking for attorney fees, Frost, was not a prevailing party. Under RCRA, attorney fees are awarded only to the "prevailing or substantially prevailing party." (178) The Ninth Circuit found that Frost did not qualify as a substantially prevailing party because there was no "gain by judgment or consent decree a material alteration of the legal relationship of the parties." (179)

Kasza argued that the district court did not properly adhere to the remand order because it limited its consideration to the transcript, rather than examining other materials the remand order had unsealed. The Ninth Circuit rejected Kasza's argument because "Kasza's argument on the original appeal focused on the transcript, as did her argument on remand" and Kasza failed to ask for more. (180) Kasza also argued that the court did not thoroughly evaluate the proposed redactions. The Ninth Circuit reviewed the redactions under an abuse of discretion standard. The Ninth Circuit held that the district court did not abuse its discretion in choosing portions of the transcript to redact because the court had already found the material subject to the state secrets privilege. The Ninth Circuit also rejected Kasza's argument that the district court should have given her hearings regarding the merits of the specific redactions. The Ninth Circuit rejected this argument because Kasza had already lost the state secrets privilege argument in Kasza v. Browner, (181) therefore, the issue had already been litigated and decided. Finally, Kasza and DR Partners doing business as Las Vegas Review-Journal (intervenors) argued that the First Amendment right of access to court records mandated the disclosure of the redacted information. The Ninth Circuit rejected this claim, stating that the risk of harm to national security had already been established in Browner and the district court had acted within its discretion.

The Ninth Circuit affirmed the findings of the district court in rejecting the award of attorney fees to the employees and approving the order for redaction of court transcripts.

Judge Wood wrote a separate concurrence urging the government either to release information that might help the plaintiffs or to enter into a settlement.

2. Zurich American Insurance Co. v. Whittier Properties Inc., 356 F.3d 1132 (9th Cir. 2004).

Whittier Properties (Whittier) appealed from the district court's grant of summary judgment in favor of Zurich American Insurance Company (Zurich). The district court held that Whittier materially misrepresented information when applying to Zurich for insurance coverage of underground storage tanks (USTs). As a result, the district court held that Zurich could rescind the insurance policy, thereby freeing itself from any liability incurred as a result of that policy. The Ninth Circuit reversed and remanded, holding that regulations promulgated by the United States Environmental Protection Agency (EPA) precluded rescission of an insurance policy that covered USTs. (182)

Whittier owned and operated a gas station near Sterling, Alaska. Originally, the station was served by two 10,000 gallon USTs. In 1993, a contractor working on these tanks discovered evidence of contamination around the tank fill pipes and dispenser locations. In August 1995, when Whittier replaced its existing system with a single 20,000 gallon tank, a contractor on the replacement project also encountered petroleum contamination. Whittier chose to proceed with the tank replacement without removing the contaminated soils. In October 1995, New Horizons, an environmental contractor, prepared a site assessment of the gas station's premises, including the UST system. Finding contamination, New Horizons notified the Alaska Department of Environmental Conservation (ADEC). Though both New Horizons and the ADEC advocated cleanup of the contamination, Whittier took no action.

In November 1999, Whittier applied for a "Storage Tank System Third-Party Liability and Corrective Action Policy" from Zurich. On the application, Whittier's owner Yovonne Baker indicated she was unaware of any prior contamination. Zurich issued the policy, incurring a coverage obligation for any contamination from the 20,000 gallon tank after December 1997. In 2000, Whittier closed the gas station; one year later, Gilfilliam Engineering and Environmental Testing (Gilfilliam) investigated the site for environmental contamination. Gilfilliam found serious contamination of the soil and nearly a foot of petroleum products floating on top of the site's groundwater which had also spread to adjacent properties. When informed of the potential claims resulting from this contamination, Zurich filed suit in district court. Zurich demanded rescission of the policy on the grounds that Whittier had misrepresented information regarding prior contamination of the site. The district court granted Zurich's motion for summary judgment, allowing rescission of the policy on the grounds of Whittier's misrepresentation pursuant to a state statute. (183) The district court held that rescission was permissible under state law because EPA's UST regulations limited only prospective cancellation, not rescission. Whittier appealed.

The Ninth Circuit reviewed the grant of summary judgment de novo, viewing the facts in the light most favorable to Zurich and assuming for review that Whittier had materially misrepresented information on its policy application. Thus, the court proceeded to address the question as to whether the EPA's UST regulations precluded rescission of the insurance policy.

Under Alaska Statutes section 21.42.110, a policy may be rescinded for misrepresentation when that omission or incorrect statement was fraudulent, material to the risk assumed by the insurer, or if the insurer would not have issued the same policy if that information had been known. However, federal regulations promulgated by EPA place limits on the cancellation of policies for USTs, requiring notification of cancellation before that cancellation is effective. (184) The Ninth Circuit examined the state and federal regulations and noted that while the federal regulations allow for the implementation of an approved state program, Alaska has not submitted such a program, and the federal regulations remained in full effect. Moreover, Alaska had passed its own regulations concerning the operation of USTs and insurance policy terminations that were very similar to and referenced the federal regulations. (185)

The EPA's regulations also include provisions governing the cancellation of a UST insurance policy upon the insured's misconduct. (186) Specifically, the regulations provide that "[c]ancellation or any other termination ... for ... misrepresentation" will not be effective unless preceded by written notice and a minimum of a ten-day period after the receipt of that notice. (187) Zurich argued, and the district court held, that this regulation related only to prospective cancellation and was not applicable to rescission of policies. Thus the district court applied the state law requiring rescission of policies based on misrepresentation. The Ninth Circuit disagreed, holding that EPA regulations, which Alaska specifically incorporated into its own law, (188) included rescission in the definition of cancellation. Furthermore, the court found that prospective cancellation of a UST policy was exclusively governed by the EPA regulations. In both instances the court deferred to EPA's interpretation, expounded in its amicus brief, that the regulations precluded rescission and were intended to be the sole remedy for a UST policy provider. As a result, the Ninth Circuit vacated the district court's grant of summary judgment and remanded the case for consideration of Zurich's remaining arguments for summary judgment as well as policy interpretation.

3. Covington v. Jefferson County, 358 F.3d 626 (9th Cir. 2004).

The Covingtons sued Jefferson County, Idaho (County) and the District 7 Health Department (D7HD) under the Clean Air Act (CAA) (189) and the Resource Conservation and Recovery Act (RCRA), (190) alleging that actions at the county dump across the street from their home violated both statutes. The Covingtons own property in Jefferson County, Idaho. In 1995, an existing gravel pit across the street from their home was converted to a solid waste landfill under the ownership and operation of Jefferson County. In Idaho, such landfills are overseen by District Health Departments; this particular landfill falls within the oversight of D7HD. The Covingtons made a series of complaints to both Jefferson County and D7HD regarding the operation of the landfill, including mismanagement of discarded appliances (white goods), fires occurring at the dump, and disposal of leaking batteries and oil cans. Although D7HD approved an Operational Plan and conducted numerous inspections, the Covingtons' concerns were not resolved to their satisfaction and they brought a citizen suit under the CAA and RCRA in 2001. This suit alleged that the landfill violated the CAA through noncompliance with federal requirements for disposal of ozone-depleting substances, and violated RCRA by contravening state regulations, not meeting federal requirements for open dumps, and allowing disposal of prohibited non-containerized liquid hazardous waste. The district court found that the Covingtons had standing under RCRA but did not have standing under the CAA. The district court then awarded summary judgment to the defendants on all three RCRA claims. The Covingtons appealed the district court's CAA standing determination and its grant of summary judgment on the RCRA claims; the defendants cross-appealed the district court's RCRA standing determination.

As a preliminary matter, the Ninth Circuit addressed an argument raised by D7HD concerning subject matter jurisdiction. Under RCRA, a citizen suit requires notice as a jurisdictional matter: For present violations, a 60-day notice is required, whereas a suit against any person alleged to have contributed to past or present violations requires a 90-day notice. (191) The Covingtons gave notice to D7HD on May 17, 2001 and filed their complaint on July 25, 2001--comprising a 60-day but not a 90-day period. D7HD thus argued that the court lacked jurisdiction over some if not all RCRA claims. The Ninth Circuit held that it had subject matter jurisdiction over the RCRA claims because 1) current violations fell within the 60-day period, and 2) RCRA contains an exception to the notice provision for subchapter III claims, relating to the leaching of hazardous waste as alleged by the Covingtons. (192) Adopting the Second Circuit's holding in Dague v. City of Burlington, (193) the Ninth Circuit held that the notice exemption applied to all claims in a "hybrid" suit that contains claims based on subchapter III and other claims as long as the claims arose from the same "closely related" circumstances. (194) Thus, the court determined it had subject matter jurisdiction over all RCRA claims.

The Ninth Circuit then determined that the Covingtons had standing to bring their claims under both RCRA and the CAA. The Ninth Circuit outlined the requirements for standing under Article III of the Constitution as a concrete and particularized injury in fact that is actual or imminent, a result of the conduct of the defendant, and redressable. The Ninth Circuit held that the Covingtons showed sufficient evidence of injury in fact under RCRA because they gave evidence that the alleged violation would affect their enjoyment of their home and land due to increased risks of fires, scavengers, and groundwater contamination, in addition to aesthetic injury. The Ninth Circuit noted that the Covingtons also showed causation and redressability as to both Jefferson County and D7HD. Because the County operated the landfill, it caused the injury, and that injury could be redressed by requiring the County to comply with RCRA. D7HD had the ability to suspend operations or compel compliance via inspections at the landfill, and so its inaction met both causation and redressability requirements. The Ninth Circuit rejected D7HD's argument that new state regulations rendered moot any possible remedy, because RCRA claims can be brought for prior violations and the agency retained its regulatory authority in spite of new regulations. Thus the court affirmed the district court's determination that the Covingtons had standing under RCRA.

The Ninth Circuit disagreed with the district court's determination that the Covingtons lacked standing to bring a claim for a leak of ozone-depleting material under the CAA. The Ninth Circuit noted that since the Covingtons brought a procedural claim, they had only to prove a relaxed version of the redressability and imminence of injury requirements. The Ninth Circuit found the Covingtons' evidence of leakage of white goods at the landfill demonstrated injury in fact under the CAA because the potential for harm to the Covingtons' property caused loss of enjoyment. The Ninth Circuit held that evidence provided which showed that the landfill did not follow CAA procedure by either preventing or documenting leaks sufficed to show causation under the CAA. Just as the fines that RCRA provides for violations of the Act were sufficient evidence of redressability under RCRA, the fine and penalty provisions of the CAA showed redressability under the CAA because those penalties were created to compel compliance by the defendants. Thus, the court held that the Covingtons also had standing to bring suit under the CAA.

Having determined the standing issues, the court turned its attention to the substantive RCRA claims. The Covingtons first argued that the district court failed to consider applicable state regulations in determining whether a violation of RCRA had occurred. Under Ashoff v. City of Ukiah, (195) RCRA authorizes citizen suits for violations of state waste management regulations even after the Environmental Protection Agency (EPA) has authorized a state program, as long as the state standards are not tougher than federal standards. (196) Therefore, the Ninth Circuit held that the district court should have addressed whether the Idaho standards were more stringent than federal standards in its discussion of whether the landfill violated RCRA, since Idaho law expressly prohibits regulations that are more stringent than RCRA regulations. (197) The Idaho regulations at issue included a cover requirement (198) and open burning regulations, (199) both of which the Ninth Circuit held were not more stringent than the requirements of RCRA. The Ninth Circuit analyzed the Idaho regulations as to cover on the basis of frequency and amount, and found that even though Idaho's regulations specified six inches of cover at the end of every operating day and the federal regulations required periodic cover but did not specify the amount of cover, the Idaho cover regulations had the same reasoning behind them as did the federal regulations and therefore were not more stringent than the federal regulations. Furthermore, the Ninth Circuit noted that the district court disregarded the Covingtons' proof of violations of the Idaho cover regulations at the landfill, and ruled that summary judgment was inappropriate as unresolved issues of material fact remained. Similarly, the Ninth Circuit decided that Idaho's open burning regulations were very similar to the federal open burning regulations, as both prohibited open burning and provided narrow exceptions to that prohibition; therefore the Ninth Circuit held that summary judgment was inappropriate on the open burning issue because there were unresolved issues of material fact. However, the Ninth Circuit rejected the Covingtons' similar arguments as to Idaho regulations regarding groundwater contamination and explosive gas, because the Covingtons did not point to any state regulations controlling these two issues.

The Ninth Circuit then addressed whether the County and D7HD violated federal open dump regulations under RCRA. The Covingtons presented five potential violations under federal regulations: groundwater contamination, covers, open burning, explosive gases, and access control. The Ninth Circuit upheld the district court's grant of summary judgment for the defendants regarding the Covingtons' allegation that the landfill violated RCRA by contaminating their drinking water because there was not enough evidence of contamination to survive summary judgment. However, the Ninth Circuit reversed the district court's grant of summary judgment for the defendants regarding the Covingtons' allegations that the landfill violated RCRA's cover requirement, ban on open burning, ban on explosive gas buildup, and ban on open access to dumping sites. The Ninth Circuit decided that, based on the Covington's evidence and inspection reports, there was sufficient controversy over whether the landfill met RCRA's cover requirement to conclude summary judgment was not appropriate. In addition, the court believed that the evidence of fires at the landfill presented a question of fact concerning whether the landfill had engaged in burnings that did not fit the narrow exceptions of RCRA. Although the Covingtons could not provide any evidence of the presence of explosive gas, the Ninth Circuit determined this was due solely to the landfill's lack of monitoring for such gas. The Covingtons had established that the landfill received items that could produce explosive gases, so there was a rebuttable presumption that such gas did exist. The court reached this conclusion because plaintiffs in similar suits would otherwise never be able to provide evidence of explosive gas when the operators had failed to monitor for the presence of such gases. Finally, the Ninth Circuit held that the Covingtons presented enough evidence to survive summary judgment on the question of access control to the landfill. The district court found both that access was controlled to an extent and that no public safety issues had arisen from public access. The Ninth Circuit disagreed, deciding that the evidence could lead a fact finder to conclude the partially uncontrolled access led to a public hazard--namely one of the fires which the County claimed was caused by entry of an unauthorized person. Overall, the Ninth Circuit dismissed the Covingtons' claim concerning water contamination but remanded the other four issues for hearing on the merits.

The Ninth Circuit last addressed the Covingtons' claim that the County and D7DH had violated RCRA by allowing the disposal of noncontainerized liquid hazardous waste in the landfill. The district court determined that RCRA's provision prohibiting the disposal of noncontainerized hazardous liquid in a landfill (200) did not have any substantive requirements and thus could not be enforced through citizen suit. While the Ninth Circuit noted that before the 1984 amendments RCRA did not have any substantive requirements, it pointed out that the 1984 amendments added substantive requirements to RCRA. The Ninth Circuit stated the statute was substantive because it proscribed conduct, therefore creating a duty to not carry out such conduct. In addition, the court pointed to the scheme Congress intended, prohibiting some waste disposal and permitting other waste disposal. Finding that refusing to enforce such a regulation would contravene the regulatory framework, the Ninth Circuit upheld the right of the Covingtons to claim a violation of the provision via citizen suit. Thus, overall the Ninth Circuit determined the Covingtons had standing under both RCRA and the CAA, and remanded the majority of the RCRA claims to the district court for further proceedings.

Circuit Judge Gould concurred and wrote separately to identify alternative grounds for standing the Covingtons might have under the portion of the CAA regarding chlorofluorocarbon (CFC) disposal and ozone degradation. Pointing out the atmospheric lifespan of ozone-depleting gases, Judge Gould would find injury because the degradation of the ozone layer would affect all life on earth. Even though this type of injury is not as specific as the general requirement for injury in fact, Judge Gould noted that so long as injury is concrete, it can provide injury in fact for the purpose of standing, and "a widespread injury, in itself, is no bar to constitutional standing." (201) Judge Gould also noted that the scientific link between CFCs and ozone depletion would satisfy the causation requirement for standing, and that since the release of CFCs creates the risk of greater exposure to radiation, the injury was imminent. Finally, Judge Gould noted that the CAA's penalties satisfied the redressability requirement by deterring violations.

II. NATURAL RESOURCES

A. Endangered Species Act

1. Center for Biological Diversity v. Badgley, 335 F.3d 1097 (9th Cir. 2003).

The Center for Biological Diversity and eighteen other nonprofit organizations (collectively the Center) sued the United States Fish and Wildlife Service (FWS), claiming that FWS's decision not to list the northern goshawk (Accipiter gentilis), as threatened or endangered under the Endangered Species Act (ESA) (202) was arbitrary and capricious. The district court granted summary judgment in favor of FWS and the Ninth Circuit affirmed, determining that FWS's decision not to list the goshawk was "amply supported by evidence in the record." (203)

The Center began petitioning FWS to list the goshawk as endangered in Utah, Colorado, New Mexico, and Arizona in July of 1991. That September, the Center requested to expand the scope of its petition from those four states to "the entire forested area of the United States west of the 100th meridian." (204) FWS responded to the Center's petition in June 1992 with a 90-day finding that the petition did not present evidence that the goshawk was a listable species under the ESA, or that the goshawk population west of the 100th meridian was distinct from the population east of the 100th meridian. The Center then filed an action against FWS in the District Court of Arizona in response to FWS's 90-day finding. The district court held that FWS did not have a clear definition of a distinct population and that FWS's finding on the Center's petition was arbitrary and capricious. The court remanded the case to FWS for a new finding. In this new 90-day finding, FWS again found that the Center did not present evidence that the listing of the goshawk was justified because the petition included more than one subspecies of goshawk and therefore "did not meet the definition of a distinct population eligible for listing under the ESA." (205) The Center filed another action against FWS as a result of this second negative finding. The district court again found that FWS was arbitrary and capricious in both rejecting the Center's petition before the Center could conform to the rule governing subspecies, and in enforcing the "only one subspecies" policy. (206) The court ordered FWS to promulgate a new 90-day finding.

FWS issued a third finding on September 29, 1997, stating that the Center presented sufficient evidence to show that the goshawk may be endangered or threatened west of the 100th meridian. FWS assembled a team of wildlife biologists with special expertise in goshawks to conduct a status review on the goshawk. After compiling data on goshawk locations and habitat, the status review team determined that the goshawk population was "relatively stable," despite the fact that goshawk habitat had declined since European settlement of the West. (207) The team had insufficient data to determine whether goshawk habitat was continuing this trend of decline.

Based on this status review, FWS published a finding on June 22, 1998, stating that its study showed that listing the goshawk as endangered or threatened was "not warranted." (208) The Center sued FWS, claiming that FWS's finding that listing the goshawk was "not warranted" was arbitrary and capricious. The district court granted FWS's motion for summary judgment.

On appeal, the Ninth Circuit reviewed FWS's decision not to list the goshawk under the Administrative Procedure Act. (209) The court relied on Friends of Endangered Species, Inc. v. Jantzen (210) to determine whether FWS "considered the relevant factors and articulated a rational connection between the facts found and the choice made" in making its decision. (211) In determining FWS's decision not to be arbitrary and capricious, the Ninth Circuit considered that FWS used information from a status review team with expertise in the area of goshawks, which conducted a comprehensive review of scientific data in the field. The court determined FWS's finding that the goshawk was not endangered or threatened was not arbitrary and capricious. Holding FWS's decision adequately supported by evidence, the Ninth Circuit affirmed summary judgment in favor of FWS.

2. Citizens for Better Forestry v. United States Department of Agriculture, 341 F.3d 961 (9th Ctr. 2003), infra Part II.C.

3. Forest Guardians v. United States Forest Service, 329 F.3d 1089 (9th Cir. 2003), infra Part II.C.

4. National Ass'n of Home Builders v. Norton, 340 F.3d 835 (9th Cir. 2003).

The National Association of Home Builders, Southern Arizona Home Builders Association, and the Home Builders Association of Central Arizona (collectively Home Builders) brought suit against the Environmental Protection Agency (EPA) challenging the designation of the Arizona population of the cactus ferruginous pygmy owl (Glaucidium brasilianum cactorum) as a distinct population segment (DPS) under the Endangered Species Act (ESA). (212) The Ninth Circuit, finding the Arizona pygmy owl population distinct but not significant, reversed the district court grant of summary judgment for the United States Fish and Wildlife Service (FWS) and remanded the case to district court.

The cactus ferruginous pygmy owl occupies territory stretching east to west from Texas to Arizona and north to south from central Arizona to central Mexico. FWS determined that although these owls were once common in Arizona, that state now is home to only 20 to 40 individuals. FWS further concluded that Arizona's population of pygmy owls comprises a DPS that should be listed as endangered under the ESA. To qualify as a DPS, a population must be both discrete and significant "in relation to the remainder of the species to which it belongs." (213) Home Builders challenged the designation of the Arizona pygmy owls as a separate DPS, but the district court upheld the listing. On appeal, Home Builders alleged that the designation of Arizona pygmy owls as a DPS violated FWS's DPS Policy (214) governing DPS listings.

Home Builders' suit in district court included a claim against the designation of critical habitat as well as the claim against the listing of the Arizona owl as a separate DPS. The district court remanded the critical habitat portion of the claim to FWS and certified the DPS designation as a final judgment under Rule 54(b) of the Federal Rules of Civil Procedure. (215) Rule 54 (b) states, "when more than one claim for relief is presented in an action, ... the court may direct the entry of a final judgment as to one ... of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." (216) The Ninth Circuit had earlier remanded the case to the district court because that court had failed to make an express determination that there was no just reason for delay. On remand, the district court stated there was no just reason for delay because the listing rule was a different administrative action from the critical habitat designation and was based on a different administrative record.

The Ninth Circuit reviewed the district court's grant of summary judgment de novo, construing the evidence in the light most favorable to Home Builders as the nonmoving parties in the district court case. As part of its de novo review, the Ninth Circuit reviewed the actions of FWS to determine whether they were "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." (217) In determining whether FWS's actions were arbitrary or capricious, the court looked to whether FWS had "considered the relevant factors and articulated a rational connection between the facts found and the choice made." (218)

FWS used the DPS designations "to provide different levels of protection to different populations of the same species" (219) as the need required. Because the ESA does not define the term "distinct population segment," FWS, in conjunction with the National Marine Fisheries Service (NFMS) promulgated a set of rules, the DPS Policy, to define the term. To include only populations necessary to conserve a species's genetic diversity, the DPS Policy limits the designation of a DPS to those populations that are both discrete and significant.

FWS found the Arizona population of the pygmy owl to be discrete because "[i]t is delimited by international governmental boundaries within which differences in ... conservation status ... exist that are significant in light of section 4(a)(1)(D) of the [ESA]." (220) The Ninth Circuit concurred, noting that an agency is entitled to deference in the interpretation of its own regulations unless the interpretation is "plainly erroneous." As a result, the Ninth Circuit deferred to FWS's interpretation in this case that "differences in conservation status" means "differences in the number of owls" on either side of the U.S.-Mexican border. (221)

FWS gave two reasons for finding the Arizona population of the pygmy owl to be significant. First, loss of the Arizona population would result in a significant gap in the range of the species that the remaining population would not fill. The Ninth Circuit agreed that the void created by the loss of the Arizona population would qualify as a gap, even though it is at one end of the owl's range. The court found, however, that this gap would not be significant. In making this determination the court evaluated four factors: 1) decrease in the genetic variability of the species, 2) reduction in the current range of the species, 3) reduction in the historic range of the species, and 4) extirpation of the species from the United States.

Looking at the first factor, the court found that FWS failed to provide evidence in the listing rule for genetic differences between the Mexico and Arizona populations of the pygmy owl. Therefore, the court had no basis for determining that the loss of the Arizona owls would decrease the genetic variability of the species. The court dismissed the second factor by concluding that the Arizona portion of the owl's range is a small portion of the owl's total range, and the number of Arizona owls is small in proportion to the total number of owls, so losing the Arizona population would not constitute a significant reduction in the species's current range.

Looking at the third factor, the court determined that loss of historical range means loss of "major geographical areas in which [a species] is no longer viable but once was." (222) The court noted that FWS failed to provide a reasoned basis for finding Arizona to be a major geographical area in the historical range of the pygmy owl, characterizing it rather as at the "periphery of the western pygmy-owls' historical range." (223) The court therefore refused to "make up for deficiencies in the agency's decision" (224) or, given the lack of evidence, to defer to FWS. Finally, the court determined that extirpation of the pygmy owl from the United States is not itself significant unless some other factor renders the loss significant to the species as a whole. In this case the court fou