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Frankenstein and pitbull? Transmogrifying the Endangered Species Act and "fixing" the San Juan-Chama Project after Rio Grande Silvery Minnow v. Keys.

  A. The Minnow and the Bosque Ecosystem
  B. The Reclamation Program and State Water Law
    1. Structure of the Reclamation Program
    2. Contracts for Project Water as Property Rights
  C. The San Juan-Chama Project
    1. Albuquerque's Use of SJCP Water
    2. The First Attack on Albuquerque's Use of San Juan-Chama
      Project Water: Jicarilla Apache Tribe v. United States
    3. The Middle Rio Grande Conservancy District and the Middle Rio
      Grande Project
  A. ESA Section 7, Discretionary Federal Actions, and the Consultation
  B. The Critical Habitat Litigation: Forest Guardians v. Babbitt
  C. The NEPA Litigation
  D. The Jeopardy Litigation: Framing the Discretion Issue
  E. The Second Attack: The Silvery Minnow Ruling
    1. Majority Opinion
    2. Judge Kelly's Dissenting Opinion
  A. The Court's Reliance on the Ninth Circuit's Emerging Discretion
  B. The Middle Rio Grande: Not Your Average Integrated Hydrosystem
  A. The Legislative Response: The Domenici-Bingaman Rider
  B. Judicial Appeals
  C. Silvery Minnow 'S Durability: Forcing Proactive Approaches to the
    Bureau's Responsibility


In 2002, as New Mexico sweated through a summer of crippling drought, stretches of the Rio Grande ran bone dry. Yet the farmers of the Middle Rio Grande Conservancy District (District) enjoyed full irrigation ditches and wet, green fields, much as they had nearly every summer since the 1920s. A clash between western water use and imperiled wildlife was about to occur. When the actors in this drama took the stage--environmental groups, a thirsty desert metropolis, irrigators, and the United States Bureau of Reclamation (Bureau)--a diminutive fish would get top billing in a political firestorm over the "pit bull of environmental laws" (1)--the Endangered Species Act (ESA). (2)

A three-judge panel of the Tenth Circuit Court of Appeals would be the latest court to sharpen the teeth of the ESA. In June 2003, after nearly ten years of acrimonious litigation, a 2-1 majority of the court ruled in Rio Grande Silvery Minnow v. Keys (Silvery Minnow) (3) that the Bureau could curtail water deliveries under contract to the District and the City of Albuquerque to help save the Rio Grande silvery minnow (Hybognathus amarus). The ruling, over a vigorous dissent by Judge Paul Kelly, (4) moved many not merely to outrage but to legislative action. Senators Pete Domenici (R-N.M.) and Jeff Bingaman (D-N.M.) (5) introduced a provision overriding the court's ruling to attach to the 2004 Energy and Water Appropriations Act. This "rider" strips the Bureau of discretion to curtail water deliveries under contract from the San Juan-Chama Project to boost flows for protection of the minnow, an endangered species under the federal Endangered Species Act. (6)

The San Juan-Chama Project (SJCP) diverts water from the headwaters of the San Juan River to the headwaters of the Rio Grande. There, SJCP water feeds Albuquerque and, further downstream, provides supplemental flow for the Middle Rio Grande Project (MRGP). (7) The SJCP has drawn the Tenth Circuit's attention before. In 1981, the court barred Albuquerque's speculative storage of imported water (and considerable evaporative losses therefrom) in Jicarilla Apache Tribe v. United States (Jicarilla). (8) Then, as now, Congress provided the "fix" to override the court's ruling. (9) This begs the question: On Jicarilla's twenty-third birthday, is history repeating itself?.

Unlike another marquee water crisis in the West today, (10) the dispute on the Middle Rio Grande poses an even more intractable problem: how to "cut off" a municipal user (here, the City of Albuquerque). In the years since Jicarilla Albuquerque has boomed, roughly doubling in the three decades prior to 2000 to 448,607 inhabitants in 2000. (11) The silvery minnow controversy brings into sharp focus the significant water needs of urban areas and the historical hegemony of irrigated agriculture.

Part II of this Note briefly frames the ecological, historical, and legal backdrop against which the silvery minnow struggle is playing out, paying particular attention to reclamation contract policy and interpretation, and the history and use of SJCP's waters. Part III traces the litigation leading up to the June 2003 ruling and analyzes the Tenth Circuit's opinion. Part IV focuses on the tension between the authorization of the San Juan-Chama Project, New Mexico law, and a line of recent Ninth Circuit opinions upon which the Silvery Minnow majority based its reasoning. The Note argues that, while correctly decided, the Silvery Minnow decision failed to articulate a clear standard of agency discretionary action as previously articulated by the Ninth Circuit. Finally, Part V examines the Domenici-Bingaman rider to the 2004 water and energy appropriations bill that hamstrings the Tenth Circuit's decision, and the intensifying political debate over how to deliver Albuquerque's share of San Juan-Chama Project water in light of the pressures brought to bear on urban water needs by the listing of aquatic species under the Endangered Species Act. The Note concludes that, although imperfect, the Silvery Minnow ruling was properly decided, and that the struggle over Albuquerque's water supply (and others like it) will drastically alter the historic "Iron Triangle" of irrigators, the Bureau of Reclamation, and western political figures. (12) With the West's cities now coming into their own, the triangle is beginning to look a lot more square.


The ethic of biodiversity protection, antiquated federal resource development law, and the contrived relationship between water and property rights in the arid West collide in the species protection debate on the Middle Rio Grande. The river presents the confounding question of how to distribute resources upon which a local economy has historically relied while protecting an ecosystem pushed to its limits by drought and a highly mechanized management scheme.

A. The Minnow and the Bosque Ecosystem

The Rio Grande silvery minnow is a member of the Cyprinidae family, one of the largest fish families on earth, and occurs only in the Middle Rio Grande. (13) The 2-3 inch minnow is hardly "charismatic megafauna" on par with the grizzly bear or bald eagle. (14) But the minnow is a bellwether of ecological health on the Rio Grande. The minnow was historically one of the most abundant fish in the river, ranging nearly one thousand miles from the Rio Grande's headwaters and tributaries to the Gulf of Mexico. (15) The minnow has vanished from 95 percent of its historic range, and now inhabits a 163-mile stretch of the Middle Rio Grande's main stem. (16)

Urban growth and irrigation-based agriculture have put tremendous pressure on the Middle Rio Grande's water resources. (17) The river itself is overappropriated, meaning that there are more claims to water rights on the river than water actually flowing in it in the driest of years. (18) In the plainest terms, the Rio Grande is a sick river. (19) The river drains a dry country and, like so many western rivers, relies on spring snowmelt to keep it wet through the searing New Mexico summer. Irrigation appropriations and dams have exacerbated the river's droughty tendencies, altering the natural pulse of runoff and suspended sediments that replenish the delicate riparian plant communities, seasonal wetlands, and gallery forests comprising the Bosque. Beyond this narrow strip of green lie the agriculture, industry, and homes of nearly 40 percent of New Mexico's population, including the metropolitan area of Albuquerque, with a population exceeding one-half million. (20) Almost two dozen federal threatened and endangered species visit or reside in the Bosque, including 227 species of birds, such as the endangered southwestern willow flycatcher (Empidonax traillii extimus), also a plaintiff in the Silvery Minnow case. (21) This vital stretch of river from Cochiti Dam to Elephant Butte Reservoir suffers the effects of considerable mechanizing, impoundment, and straightening. (22)

B. The Reclamation Program and State Water Law

1. Structure of the Reclamation Program

The SJCP is a creature of 19th century federal law promoting westward expansion. With the passage of the Reclamation Act of 1902, (23) the United States initiated a systematic effort to make the desert bloom. Congress established in the Department of the Interior the Bureau of Reclamation to oversee this near-mythic effort. (24) In "reclaiming" the Western lands from the ravages of their natural aridity, the federal government embarked on a campaign of constructing dams, canals, and other facilities to realize a Jeffersonian ideal--a far-flung agrarian network of prosperous family farms. (25) While the Desert Lands Act (26) made land in the public domain available to homesteading and irrigation under state law, the paucity and remoteness of water capable of development in the arid and semiarid West required resources beyond the capacity of the yeoman farmer, the states, or private irrigation companies. (27) The Act limited water deliveries from federal projects to a mere 160 acres per "any one person," (28) the amount of land thought sufficient at the time to support a family farm. Enforcement of that limit was less than vigorous, however, (29) leading to the practice of "water spreading"--the unauthorized use of federal project water on lands not approved by the Bureau. (30) The 1982 Reclamation Reform Act (31) also expanded the original irrigation purpose of the reclamation program to include hydropower, industrial, and municipal uses. (32)

As the federal agency established to oversee this system, the Bureau currently operates 348 storage reservoirs, 254 diversion dams, 268 major pumping plants, 59 hydroelectric power plants, over 25,000 miles of ditches, canals, and pipelines, 37,000 miles of distribution ditches, and over 17,000 miles of drains. (33) These facilities represent 245 million acre-feet of storage capacity, enough to irrigate over ten million acres of farmland. (34) These facilities store, release, divert, and deliver reclamation project water after the Bureau obtains water rights under state law. (35) Such project water is then distributed to users--typically, irrigation districts and municipalities--through federal contracts. The Bureau delivers project water under two types of contracts: repayment contracts and water service contracts. (36) In a water service contract, an organization pays for annual water deliveries which the Bureau agrees to deliver at a predetermined rate. (37) Repayment contracts are the most common, wherein a water use organization, usually an irrigation district, a special conservancy district, or a water users' association, receives water in return for making scheduled payments on a portion of the costs of building, operating, and maintaining a project. (38)

The 1902 Reclamation Act embodies a policy of "cooperative federalism." (39) Section 8 of the Act declares a certain deference to state water law. (40) The Act further provides that "the right to the use of water acquired under the provisions of this Act shall be appurtenant to the land irrigated, and beneficial use shall be the basis, the measure, and the limit of the right." (41) Thus, Congress required projects to obtain water rights under state law. In many cases--New Mexico being no exception--this meant the projects acquired water rights in conformance with the tenets of the Western doctrine of prior appropriation. (42) In the early days of the reclamation program, cooperative federalism was in fact cooperative, with few disputes arising between the states and the federal government as the Bureau generally deferred to state water law not only in the acquisition of project water rights, but also in the water's release from project works and delivery to users. (43)

The deferential policy embodied in section 8 began to show fissures as states sought to apply laws at odds with basic provisions of reclamation law. United States Supreme Court decisions at mid-century created considerable debate regarding state authority and federal duties with respect to project water rights. (44) However, the Court put to rest much of the uncertainty created by these earlier opinions in California v. United States. (45) In that case, California had attached 25 conditions to a state-issued water right permit for the construction of and storage behind the New Melones Dam, a 2.4 million acre-foot impoundment on the Stanislaus River in the Bureau's vast Central Valley Project. (46) The Court, after a thorough exploration of the legislative history of the Reclamation Act, held that the Bureau must "follow state law in all respects not directly inconsistent" with congressional directives authorizing the project. (47) Thus, the Court rejected the United States' argument that the state lacked authority to impose conditions on reclamation project water right permits, and remanded the case to the Ninth Circuit to determine whether California's conditions on the New Melones Dam permit were actually inconsistent with the project's authorization under federal law. (48)

2. Contracts for Project Water as Property Rights

The more difficult question posed by California was whether, in the absence of an inconsistency between the project's authorizing legislation and state water law, the Bureau, as an appropriator under state law, may allocate previously contracted-for project water to instream uses for environmental protection. The answer to this question, which the Tenth Circuit in Silvery Minnow attempted to resolve, lies in the idea of contract rights as vested property rights, the terms of the contracts at issue, and, most importantly, whether existing contracts with private entities limit the sovereign power of the United States to change policies to reflect the public interest. In general, the Bureau cannot unilaterally change contracts calling for the delivery of project water. (49) While the irrigators, through the district or water-use organization, retain a vested right to contract water requiring performance by the Bureau in the form of delivery, there are two notable exceptions. First, the Bureau can renegotiate price terms during contract renewal. (50) Second, and relevant to the Silvery Minnow case, the Bureau can modify existing contract rights where Congress requires a change unless the contract has relinquished Congress's power to legislate subsequent to the contractual arrangement in "unmistakable terms." (51)

Districts and irrigators have argued in several contexts that federal actions reflecting changes in federal policy deprived them of property rights under reclamation contracts. In Madera Irrigation District v. Hancock, the District sought to prevent the government from changing the terms of water service contracts during renewal negotiations. (52) In addition, the District challenged a provision in the new contracts that subjected the District to modification dependent on a forthcoming environmental impact statement (EIS) under the National Environmental Policy Act (NEPA) (53) and the outcome of consultation between the Bureau and the United States Fish and Wildlife Service (FWS) under section 7 of the ESA. (54) While the court determined that the District did have a vested property right to delivery of water under the contract, the terms of the new contract regarding the ESA and NEPA outcomes did not violate existing rights. (55)

The Ninth Circuit has held that in order to demonstrate a wrongful taking or impairment, a water user must establish that it holds a cognizable property right arising out of a federal contract and then show substantial impairment of that right by the government. (56) In O'Neill v. United States, (57) the Ninth Circuit held valid a clause limiting the United States' liability for curtailing project water deliveries in the case of a shortage of available water, and further held that the Bureau could reallocate water from irrigation to endangered species to carry out mandatory duties under federal law. (58) The water district sued soon after the Bureau announced that the district's consumers would receive only half of their contractual water supply. This occurred after consultation under the ESA resulted in a biological opinion (BiOp) concluding that the Bureau's continued operation of the project "was likely to jeopardize the continued existence" of listed salmon in the Sacramento River. (59) The Ninth Circuit observed that contracts to which the sovereign is a party are subject to subsequent legislation by the sovereign, and upheld the Bureau's action under the ESA. (60) The decision in O'Neill, however, was based on specific legislation amending the Central Valley Project's authorizing statute, although the District Court had upheld the Bureau's actions under the less specific requirements of the ESA. (61) The Ninth Circuit stated that the express dedication of federal project water for fish and wildlife preservation and habitat restoration purposes, included in the Central Valley Project Improvement Act (CVPIA), (62) was a proper amendment to the reclamation laws which the contracts clearly contemplated. (63)

In Natural Resources Defense Council v. Houston (NRDC v. Houston), (64) the Ninth Circuit held that the Bureau had sufficient discretion over contract renewal negotiations with districts pursuant to the CVPIA to trigger a mandatory duty to alter contract terms to conform to the ESA. (65) The reclamation laws gave the contractors "a first right" to a "share or quantity of the project's available water supply," but the ESA gave the Bureau the authority to reduce the total amount of available project water to be delivered. (66) In accordance with the extensive protective purposes of section 7, "[t]he term 'agency action' has been defined broadly." (67)

Further, in Klamath Water Users Protective Ass'n v. Patterson (Klamath Water Users), (68) the Ninth Circuit held that the Bureau retained sufficient control over project operations on the Klamath River to trigger its duty to operate the Link River Dam in conformity with the ESA. (69) Irrigators challenged the Bureau's decision to reduce releases from a federal dam to provide minimum lake levels for fish species listed as threatened or endangered. The irrigators claimed the reduction would interfere with their rights under contract. The contract had been entered into under "the Reclamation Act and acts of Congress relating to the preservation and development of fish and wildlife resources." (70) Although the irrigators were not parties to the contract signed by the Bureau and a power company, they asserted their rights as third-party beneficiaries. (71) The court found that the Bureau had retained authority to manage the dam, "and because it remains the owner in fee simple of the Dam, it has responsibilities under the ESA as a federal agency. These responsibilities include taking control of the Dam when necessary to meet the requirements of the ESA, requirements that override the water rights of the Irrigators." (72) These three Ninth Circuit cases apply a limited reading of contractors' rights to receive water from federal projects, and a broad construction of the amendatory nature of the ESA.

C. The San Juan-Chama Project

Like the other Bureau projects over which contractual disputes have erupted, the San Juan-Chama Project (SJCP) is as much a feat of the Bureau's engineering as it is an emblem of the agency's obdurate willpower. Conceived and built during the heyday of what one commentator has dubbed the Bureau's "Age of Dams," (73) SJCP siphons water from the high basins of Colorado's San Juan Mountains through twenty-six miles of massive tunnels bored deep below the rugged Continental Divide. This water, once the lifeblood of the Navajo and Little Navajo Rivers, tributaries of the San Juan River (and, in turn, the Colorado River), next finds itself in Heron Reservoir at the headwaters of the Rio Chama, a tributary of the Rio Grande. (74) There, beneath the bright southwestern sun, this well-traveled resource awaits its release to downstream water users on the Middle Rio Grande, most notably the City of Albuquerque (City) and the Middle Rio Grande Conservancy District (District). (75)

In 1962, Congress gave the project life by enacting the San Juan-Chama Project Act (SJCP Act) (76) pursuant to the Colorado River Storage Project Act of 1956 (Storage Act). (77) The Storage Act was enacted to "initiate the comprehensive development of the water resources of the Upper Colorado River Basin, for the purposes, among others, of regulating the flow of the Colorado River, [and] storing water for beneficial consumptive use." (78) The Storage Act provided for the "reclamation of arid and semiarid land," flood control, and hydropower. The Secretary of the Interior was further directed to construct, operate, and maintain the SJCP. (79) The SJCP Act gave further flesh to the skeleton of the Storage Act, authorizing the construction of Heron Dam and Reservoir, just upstream of Albuquerque,
   [f]or the principal purposes of furnishing water supplies to
   approximately thirty-nine thousand three hundred acres of land in
   the Cerro, Taos, Llano, and Pojoaque tributary irrigation units in
   the Rio Grande Basin and approximately eighty-one thousand six
   hundred acres of land in the existing Middle Rio Grande Conservancy
   District and for municipal, domestic, and industrial uses, and
   providing recreation and fish and wildlife benefits. (80)

The City and the District both entered into section 9(d) repayment contracts with the Bureau in 1963, "pursuant to the Federal Reclamation Laws ... all as amended or supplemented." (81) The City and the District agreed to repay the United States a portion of project construction, operations, and maintenance expenditures in return for the Bureau's promise to deliver a firm yield of "water available for use through the project works." (82) Under its contract, the City of Albuquerque holds a right to municipal and domestic use of 47.35 percent, and the District a right for irrigation to 20.55 percent of the SJCP's annual firm yield of approximately 100,000 acre-feet. (83) Five and six-tenths percent of these costs are directed towards "fish and wildlife functions." (84) The contractors do not pay for that portion of Project operations that are devoted to fish and wildlife allocations. This fish and wildlife clause provides for modification of these percentages if unforeseen circumstances unbalance the allocation. The clause indicates that fish and wildlife needs were contemplated by the parties at the time of drafting, leaving reallocation of the percentage allocations up to the Bureau while obligating the Bureau to shoulder the cost burden of such reallocations for fish and wildlife purposes. (85) In addition, each contract contained a shortage clause, relieving the United States of any liability "on account of drought or other causes." (86)

Under the city and district contracts, each contractor retained the exclusive right to use and dispose of its share of available and allocated water so long as it kept current on its payments. Moreover, upon full payment of each contractor's obligation, the contractor would acquire a permanent right to the use of the contracted allocation. The contracts provide that "available" SJCP water was authorized for irrigation, municipal uses, for "providing recreation and fish and wildlife benefits, and for other beneficial purposes." (87)

1. Albuquerque's Use of SJCP Water

Albuquerque's recent history and, most importantly, its future are fundamentally tied to the San Juan-Chama Project. (88) With a share of about half the SJCP's yield, the City of Albuquerque is unmistakably the chief player in administration of the Project. Early on, the City, situated relatively high in the semiarid Rio Grande Basin, recognized the critical importance of importing surface water for municipal use. Additionally, the State understood well the necessity of perfecting its right to the waters divvied up by the interstate Colorado River Compact of 1922. (89) At mid-century, this arid, lightly populated state's fortunes rested on Albuquerque's emergence as a major economic engine in the state's drive to keep pace with its neighbors. A reliable municipal water supply to meet all future needs would be the fuel for this engine. Thus, the push for SJCP authorization was born. (90)

Originally, the plan seemed simple: Albuquerque would store SJCP water in the Heron Reservoir, releasing the water into the Rio Grande to replace alluvial groundwater drafts on its local aquifer. (91) Based on hydrological and geological misunderstandings of the aquifer, the City's water planners claimed that it would take decades for Albuquerque's need for its full allotment to mature. (92) However, recent studies have confirmed unequivocally that this hydrologic dynamic was simply not proving out: For nearly two decades, Albuquerque had been mining its aquifer. (93) Renewable surface water and SJCP were not replenishing groundwater critical for the City's development. In response, the City recently adopted a plan to fully develop its right to SJCP water by 2006. (94) Accordingly, SJCP water is the "magic bullet" that will rescue this thirsty city from the perils of mining its aquifer. (95)

2. The First Attack on Albuquerque's Use of San Juan-Chama Project Water." Jicarilla Apache Tribe v. United States

Before the City could chamber its magic bullet, it had to put SJCP water to beneficial use, even if it did not need the full measure of the water to slake its thirst. The dispute over the City's prospective storage of SJCP water provides a telling allegory in just how far the bounds of logic may be pushed to keep the federal spigot open. Throughout the 1970s, the City claimed its full SJCP allotment of 42,500 acre-feet, well aware that inadvertent largesse meant irretrievable loss under the prevailing western doctrine of prior appropriation, and proposed to store this unused portion in Heron Reservoir and downstream at Elephant Butte Reservoir. The Bureau of Reclamation, quite naturally, complied. (96)

Piqued by the loss of the precious resource they had fought for, which was evaporating under the searing lens of the New Mexico sun, the Apaches took their claim to court, filing to obtain a general adjudication of New Mexico's portion of the Navajo Basin in 1975. (97) The Tribe also sought an injunction seeking to prohibit illegal diversions on the Navajo River from the SJCP. (98) The Tribe sought a declaratory judgment that the agreement between Albuquerque and the Bureau was contrary to law. (99) The City and the State of New Mexico's Interstate Stream Commission intervened. (100) On appeal to the Tenth Circuit, the State and City argued that long-term storage of project water for future municipal use was a reasonable, beneficial use under New Mexico law, and that state water law should govern the distribution of water from federal projects unless Congress expressed a contrary intent. (101) In support, the Bureau argued that the City had a reasonable time to develop use for the water, and thereby perfected its right by prospective diversion and storage. (102) The City claimed, although it had declined to do so at trial, that not only was storage for prospective municipal purposes in Elephant Butte a beneficial use under New Mexico law, but that ancillary recreational purposes for which the reservoir was used also constituted a recognized beneficial use under state law. (103)

The Tenth Circuit disagreed with the City and State on all claims and affirmed. First, the court dismissed the argument that, under New Mexico law, speculative storage for municipal use and sales and exchanges with other beneficial users, as well as incidental power generation, constituted a beneficial use. (104) The court, persuaded by evidence demonstrating that such long-term storage in Elephant Butte would result in 93 percent evaporation of all water stored, denied that state law permitted such waste. Maximum utilization preventing waste, the court responded, was a fundamental tenet of state water law with which such significant evaporative losses could not be reconciled. (105) Though recognized uses under state law, the storage for future municipal uses, ad hoc sales and exchanges, and incidental power generation were too remote or speculative to constitute a beneficial use. (106)

Yet the court devoted the bulk of its opinion to the issue of recreational use under New Mexico law. (107) The court rejected the City's attempt to shoehorn recreational use into a congressionally recognized municipal use. (108) The question was whether section 8 of the Reclamation Act required the Bureau to defer to state water law in distributing water from federal projects. (109) Relying on California v. United States, the court stated that once water was released from the federal project, state law governed its use. The court opined that recreational use clearly clashed with Congress's intent in authorizing the project. (110) The court declared that the Bureau could not knowingly release water for a use not recognized as beneficial under New Mexico law, unless specifically instructed to do so by Congress. (111) Where a state law placed priority of one use over another, state law would control, unless it would impair the efficiency of the project for irrigation purposes. (112)

The Tenth Circuit posited that fish, wildlife, and recreation benefits could be valid, congressionally-recognized uses to which reclaimed water could be applied. (113) However, the court interpreted both the Storage Act and SJCP Act as designating irrigation and municipal uses as primary purposes of the Project. (114) Under the Storage Act, such storage was "to be only for beneficial consumptive use; storage solely for recreation fails to meet those guidelines." (115) Certainly, the court acknowledged, Congress had contemplated the possible ancillary benefits to recreation, fish, and wildlife in authorizing the SJCP. The structure of the San Juan-Chama Project Act prioritized irrigation as the SJCP's principal purpose, followed by municipal, domestic, and industrial use. (116) Soon after, Congress, under pressure from the City and State, overrode the court's ruling by amending the SJCP Act to expressly permit the storage of contracted-for SJCP water. (117)

3. The Middle Rio Grande Conservancy District and the Middle Rio Grande Project

Albuquerque has some thirsty neighbors. The District is a quasi-public agency of the State of New Mexico charged with providing irrigation water to farmers along the Middle Rio Grande. The District oversees water rights owned by six Indian pueblos that border the river and 70 community acequias. (118) Despite the resistance of these traditional water users, the District collapsed these rights, and now owns much of the land bordering the silvery minnow's riverine habitat. The District diverts water at Angostura, Isleta, and San Acacia dams and redirects water for irrigating alfalfa, chili peppers, vegetables, and feed crops valued at $28 million. (119)

At the behest of Albuquerque's civic boosters, the District was formed in 1923 by a state District Court order (120) pursuant to the New Mexico Conservancy Act. (121) In order to organize a district, the original Conservancy Act provided that a petition must be signed by the majority of landowners within the District's proposed boundaries. (122) The District was to operate on assessments paid by the member landowners. (123) From the start, the District was unpopular, with key participants realizing benefits disproportionate to their investment by deferring costs to future users. (124) Despite the raw deal the District offered to the majority of smaller member landowners, the New Mexico Supreme Court found the District constitutional. (125) Within five years, the District found itself $7.5 million in debt. (126) In response to heavy pressure from investors, the federal government came to the aid of the faltering District by paying its debt, purchasing the antiquated works, and agreeing to re-tool the facilities--thereby re-forming the District into what is now the Middle Rio Grande Project (MRGP). (127) In return, the District entered into a repayment contract under Reclamation Act section 9(d), transferring its water rights and title to the Bureau. (128) Despite the federal takeover and extensive refurbishment of the District's works in the 1940s and 1950s, the District remains one of the most wasteful irrigation districts in the West, diverting on average over 11 acre-feet per acre annually, primarily to grow feed crops like alfalfa. (129) Its diversions are by far the greatest on the Middle Rio Grande. The District's total appropriation of Rio Grande water is 238,000 acre-feet, 20,900 of which are provided as a supplement through the SJCP. (130)


The struggle over the SJCP water resurfaced in the late 1990s, this time catalyzed not by tribal claims to the water, but by Endangered Species Act litigation. The route to last summer's Tenth Circuit ruling was a tortured path. As the Tenth Circuit quipped, the history of the litigation was characterized by "[b]rinksmanship precipitated either through inadvertence or design." (131)

A. ESA Section 7, Discretionary Federal Actions, and the Consultation Requirement

The ESA places several requirements on federal agencies. The first is a broad duty to "conserve endangered species" and further the purposes of the ESA. (132) Section 7(a)(1) places an affirmative duty to conserve listed species on the Department of the Interior and all other federal agencies. (133) Once a species is listed as endangered or threatened, section 7(a)(2) of the ESA requires all federal agencies to "insure that any action authorized, funded, or carried out by such agency ... is not likely to jeopardize the continued existence" of any endangered or threatened species or result in the destruction of critical habitat. (134) The term "action" includes "all activities or programs of any kind authorized, funded or carried out, in whole or in part, by Federal agencies," including "the granting of licenses, contracts, leases, easements, rights-of-way, permits, or grants-in-aid." (135) Perhaps the strongest enunciation of this broad interpretation of "agency action" occurred in Tennessee Valley Authority v. Hill (TVA), (136) in which the Supreme Court rejected the contention of the Tennessee Valley Authority (TVA) that the ESA did not apply to a federal project that was well under way when Congress passed the ESA in 1973. (137) The Court noted that "[t]o sustain [this] position ... we would be forced to ignore the ordinary meaning of [the] plain language [in section 7(a)(2)]." (138) Although the dam was planned and approved years before passage of the ESA, the Court found that TVA's operation of the dam constituted agency action and enjoined the dam's operation. (139)

When undertaking an action, an agency must determine whether the action may affect an endangered or threatened species. (140) The action agency prepares a biological assessment "for the purpose of identifying any endangered species or threatened species which is likely to be affected" by the proposed action. (141) If the action agency determines that the proposed action may have an effect, the agency must formally consult with the United States Fish and Wildlife Service (FWS). (142) During the consultation, parties must not make "any irreversible or irretrievable commitment of resources with respect to the agency action which has the effect of foreclosing the formulation of implementation of any reasonable and prudent alternative measures which would not violate" section 7(a)(2). (143)

After formal consultation, FWS issues a BiOp evaluating the potential effect on the protected species. If the BiOp concludes that the proposed activity is likely to jeopardize an endangered or threatened species, the agency identifies reasonable and prudent alternatives (RPA) to avoid the action's negative impacts. (144) If the BiOp concludes that the proposed activity is not likely to jeopardize a listed species, then the proposed action is permitted. (145) The section 7 duty to consult can be ongoing, and consultation must be reinitiated under certain circumstances. (146)

The Department of the Interior's regulations implementing the ESA apply the consultation requirement to "all actions in which there is discretionary Federal involvement or control." (147) Section 7's consultation duty is not triggered when an action agency lacks the discretion to influence actions that affect listed species. (148) An agency is required to reinitiate consultation where "discretionary Federal involvement or control over the action has been retained or is authorized by law." (149) The courts have generally deferred to the federal agencies when they have defended its actions against the claims of water users. (150) In Carson-Truckee Water Conservancy District v. Clark, (151) the Ninth Circuit suggested that the Bureau has discretion to direct that projects be operated with the primary purpose of protecting listed species. (152) In Riverside Irrigation District v. Andrews, (153) the Tenth Circuit seemed to require the Secretary to ensure that instream flows protect listed species. (154) The court upheld the United States Army Corps of Engineers' denial of a permit to dam a tributary of the South Platte River that would have resulted in reduced instream flows. (155) The reduced instream flows would have adversely modified the critical habitat of the endangered whooping crane. (156)

B. The Critical Habitat Litigation: Forest Guardians v. Babbitt (157)

In July 1994, FWS, after missing a statutory deadline, listed the silvery minnow as an endangered species. (158) Although the ESA strongly encourages concurrent designation of a species's critical habitat at the time of listing, (159) FWS concluded that the minnow's critical habitat was "not [then] determinable." (160) Instead, FWS opted for a one-year extension of critical habitat designation pursuant to ESA section 4(b)(6)(C). (161) Forest Guardians and Defenders of Wildlife subsequently sued, alleging that the Secretary's failure to designate critical habitat violated the ESA. (162) Because of Congress's 13-month moratorium in 1995 (163) on critical habitat designation funding, the Secretary requested a further extension of the deadline. (164) FWS, starved for money by Congress, pled fiscal impossibility before the trial court. (165) FWS requested the court defer to its interim prioritization of designations pending the lifting of the moratorium. (166) The United States District Court for the District of New Mexico (District Court) stayed the proceedings. (167) The Tenth Circuit vacated the District Court's stay order and remanded to the District Court to order the Secretary to promulgate a final rule designating the minnow's critical habitat. (168) In July 1999 (nearly a decade after the administrative process to list the minnow began) the Secretary designated 163 miles of the river, from Cochiti Dam to Elephant Butte Reservoir, as critical habitat. (169)

C. The NEPA Litigation

All parties knew that the hard-won critical habitat designation was flawed. The State, the District, and the environmental groups consolidated their action, alleging the designation was arbitrary and capricious for failing to adequately consider economic and other impacts under the National Environmental Policy Act (NEPA), (170) and that the designation did not reflect the "best scientific and commercial data available" as required by ESA section 4(b)(2). (171) The District Court agreed, faulting FWS for its failure to consider "the most basic reality of the Rio Grande: [that] it is a fully appropriated river system. Rights to all of the river's surface water are legally held for a variety of beneficial uses." (172) The court determined that FWS had grossly underestimated the economic ramifications of its designation, basing its analysis of water available for maintaining critical habitat on data from several inordinately wet years. (173) Requiring continuous flow through the 163-mile reach of critical habitat would lead to disastrous economic consequences to local farmers during the oscillations of the Rio Grande's notoriously fickle water cycle. (174) Bank-to-bank flow, the court observed, was impossible to rectify with local conditions and overappropriation. (175)

However, the court let the critical habitat designation stand while ordering FWS to restart the NEPA process, emphasizing the "urgency of the situation and the complexity of the many interests to be reconciled." (176) FWS proposed a new critical habitat designation. (177) However, the Secretary did not conduct an EIS and appealed the District Court's order. (178) The appellate court condemned such delay as pushing the minnow perilously close to extinction during the deep drought summer of 2001, when FWS personnel were forced to round up minnows from overheated pools. (179) Furthermore, the failure to issue an EIS ignored the significant effects the designation would have on the human environment of the Middle Rio Grande. (180) The new critical habitat designation's requirement of a continuous flow was fundamentally at odds with the economic realities of a fully appropriated river system. (181)

Thus, the central conflict was framed: The federal agencies in charge of managing the river had a duty to avoid adverse impacts to the minnow's habitat under the jeopardy standard of ESA section 7(a)(2), (182) yet an obligation to mitigate the intense economic and social impacts of flow curtailment and reallocation under NEPA. (183) In affirming the District Court's unequivocal order, the Tenth Circuit presaged the looming storm: Did the conflicting mandates of the ESA, state water law, and reclamation law allow the Bureau to turn off the faucet of long-held, legally enforceable expectations of water users in favor of a tiny desert bait-fish?

D. The Jeopardy Litigation: Framing the Discretion Issue

The answer to this question came in two subsequent 2002 District Court orders penned by Chief Judge James A. Parker. (184) In an effort to wrench closed the Bureau's open spigot, Defenders of Wildlife, Forest Guardians, the National Audubon Society, the New Mexico Audubon Council, the Sierra Club, and the Southwest Environmental Center sued the Bureau and the United States Army Corps of Engineers (Corps) for alleged violation of ESA section 7. (185) The complaint stemmed from a June 29, 2001 BiOp issued by FWS which found that the Bureau's operations on the Middle Rio Grande were "likely to jeopardize the continued existence of the silvery minnow," yet offered only a single reasonable and prudent alternative (RPA) that FWS concluded would avoid jeopardy. (186) Sensing a threat to its stake in SJCP, the City intervened, as did the District and State.

Judge Parker did not agree with the plaintiffs that the single RPA devised to avoid jeopardy had been arbitrary and capricious, noting that the RPA's "non-water related elements" of habitat mitigation, artificial minnow propagation, and repopulation were sufficient to ensure recovery in a year of average precipitation. (187) But Parker bit on the environmental plaintiffs' contention that the Bureau, in its consultations with FWS, should have considered alternatives limiting water deliveries to the City of Albuquerque and the District. (188) The court ordered the Bureau and the Corps to reinitiate consultation with the FWS, specifically holding that, should it be necessary to avoid jeopardy, the Bureau had discretion to reallocate contract deliveries. (189) The District Court based its conclusion that the federal defendants had not properly considered all their available discretionary alternatives on ESA section 7(a)(2), the accompanying regulations defining discretionary actions, (190) the Reclamation Act, a broad reading of the Bureau's water delivery contracts, and a trio of Ninth Circuit cases. (191) Although the Bureau had not consulted with FWS on the alternative of curtailing water deliveries to contractors, the court found that this procedural violation was not fatal to the June 2001 BiOp. (192)

An unprecedented dry winter conspired against the minnow and the parties in 2002. Given conditions in the river, the Bureau could not operate under the June 2001 BiOp, meet contract obligations, and ensure the minnow's recovery. (193) Instead of reinitiating emergency consultations, however, the Bureau took no action and delivered the full measure of irrigation water to the District from the Middle Rio Grande Project and SJCP under the June 2001 BiOp, which expressly mandated that the agencies reinitiate consultations if river conditions changed appreciably in the interim. (194) The federal defendants sought an exemption from ESA compliance from the District Court, which refused and instead ordered the issuance of a new BiOp. (195) The agencies complied, reinitiating consultations in August and issuing the BiOp on September 12, 2002. Plaintiffs immediately appealed, and the District Court granted preliminary emergency injunctive relief. (196) Finding the threat of harm to the minnow imminent and irreparable if the Bureau were to conduct operations pursuant to the new BiOp, Judge Parker found the September 2002 BiOp arbitrary and capricious. (197) Agreeing with the plaintiffs, the court concluded that this newest BiOp had failed to fully consider the reduction of contract deliveries in order to comply with the substantive mandate of the ESA, and failed to avoid river drying in the heart of the minnow's habitat. (198)

The Bureau had backed itself into a corner. Its five-month acquiescence had put the September 2002 consultation process under an impossible time crunch. In crafting his order, Judge Parker mandated that the Bureau take the following actions: provide sufficient flows for the remainder of 2002 and maintain a minimum flow through the Albuquerque reach, release water from Heron Reservoir to meet 2002 flow requirements, compensate water users for reduced contractual deliveries to meet flow requirements, reinitiate consultations immediately to plan for contingencies in 2002-2003, and reduce contract deliveries from the SJCP consistent with the Bureau's legal discretion. (199) The District Court's order would expire on December 31, 2003. (200)

E. The Second Attack: The Silvery Minnow Ruling

1. Majority Opinion

The Tenth Circuit, Judge John Porfilio writing for the 2-1 majority, affirmed Judge Parker's order. Not only did the panel hold that the Bureau had discretion to reduce previously contracted water deliveries to comply with the ESA, it also confirmed that the diversion of water for species protection was a beneficial use under state water law, and that the delivery contracts between the Bureau and water users did not provide perpetual and exclusive rights to water users. (201)

The majority relied on a broad reading of the plain terms of the contracts, and adopted the Ninth Circuit's reasoning in O'Neill, Klamath Water Users, and NRDC v. Houston. (202) The court rejected appellants' claim that the SJCP and MRGP Repayment Contracts with the City and the District defined the Bureau's obligations under the ESA. (203) The Bureau argued that the contracts did not permit any reduction in water deliveries. Accordingly, the Bureau believed it had no discretion to curtail flows and no duty to consult with the Service over nondiscretionary actions. (204) The court First focused on the plain terms of clauses in the Bureau's 1963 contract with the City to deliver SJCP water and the District's contract for deliveries from MRGP that limited the government's liability in the event of water shortages. (205) These "Shortage Clauses" expressly limited the United States' liability for delivering less water than required under contract "[o]n account of drou[ght] or other causes" (206) or stemming from "a shortage in the quantity of water which normally would be available." (207) Casting these clauses against a backdrop of federal law, the court reasoned that the contracts' authorization had been expressly rooted in the Reclamation Act and the projects' authorization statutes "all as amended or supplemented." (208) The ESA was precisely the amendatory legislation that modified the Bureau's duties under the contracts. (209)

The Bureau urged a narrow construction of the ESA's amendatory function, arguing that the ESA did not contemplate the federal government manufacturing a water shortage of its own creation as an obligation under ESA. (210) Since neither of the projects' authorizing statutes expressly permitted reallocation for fish and wildlife protection, such reallocation of contractually committed water exceeded the Bureau's scope of legal authority. A reasonable and prudent alternative, argued the Bureau, must be within the agency's legal authority under ESA section 7 interpretive regulations. Thus, the Bureau argued that the ESA expressly forbade the Bureau's consideration of reallocation as a permissible RPA. (211)

Further, the majority refused adopt the Bureau's position that the Ninth Circuit's holdings in O'Neill, Klamath Water Users, and NRDC v. Houston were to be narrowly confined to instances where amendatory reclamation law expressly mandated water reallocation--an interpretation that the court found to subvert Congress's sovereign authority to enact subsequent legislation. (212) Regardless of the project authorization statutes' failure to mention fish and wildlife protection, the majority concluded that the ESA's mandate preempted the Bureau's project water allocation duties. (213) The court found considerable traction in O'Neill, where the Bureau had argued for a broad interpretation of identical shortage clauses. (214) The court found that O'Neill, working in concert with Ninth Circuit precedent, wrote Judge Porfilio, stood for something far broader: the repayment contracts could not be read to limit the ESA's reach (and thus the Bureau's discretion) unless they expressly surrendered Congress's sovereign power to enact legislation in unmistakable terms. (215) Reclamation contracts were to be construed as "contemplat[ing] future changes in reclamation laws." (216) Further buttressing O'Neill's persuasive force, the Silvery Minnow majority relied on NRDC v. Houston, which posited that the Bureau, in renegotiating water delivery contracts to Central Valley irrigators, retained the discretion to reduce previously contracted water allocation if necessary to meet its overarching ESA mandate. (217) Because the Bureau controls the project works and contracting authority, "the responsibilities of that status included the authority to direct ... operations to comply with the ESA." (218)

The State, seeking to assert its role in administering the waters within its borders, argued that such a broad interpretation of reclamation contracts effectively seized water from Heron Reservoir, irreparably harming its citizens. (219) Furthermore, it declared that supplementing the ailing river with SJCP water to benefit the minnow cut against the grain of the SJCP's purposes, thereby ignoring the clear distinction between normative project water and native Rio Grande flow. (220) As a result, the State urged the two-tiered approach to beneficial use of SJCP posited by Jicarilla; delivery of water for municipal, domestic, industrial, and human needs during times of drought was the primary purpose of the project, while species protection and recreation were incidental, secondary beneficial uses. (221) The majority responded that releasing SJCP water to prevent jeopardy to the silvery minnow constituted a beneficial use under New Mexico law and the SJCP Act. (222) With its post-Jicarilla amendments, the court could identify no clear statutory prioritization of uses under the SJCP Act. Under the court's interpretation, SJCP water and native river flows ceased to be discrete entities. Instead, they function in tandem as an interconnected system, the SJCP offsetting man-made or natural shortages. (223)

The City resurrected the State's argument that because the Bureau held no rights under state law to SJCP water, its duty to store water in Heron Reservoir for the beneficial use of SJCP contractors truncated its ESA obligations. (224) At most, the contract bestowed upon the City an inchoate expectation that its allocation would arrive, subject to factors that affect the amount of water available--a promise, not a guarantee. (225) Unlike the City, the District argued that it indeed held private rights to the Middle Rio Grande Project's water under a state permit. Relying on Klamath Water Users, the majority held that the Bureau, as a condition of the District's federal bailout in the 1940s, took title to the MRGP works, but not the District's water. The Bureau stored native water to be released on the District's call under permit. The court drew a critical distinction, again relying on Klamath Water Users. While the Bureau does not own a water right, it owns the project works, triggering the agency's duties under the ESA. (226) Additionally, the court invoked the Fish and Wildlife Coordination Act of 1958 (FWCA) (227) to bolster its holding that the Bureau, despite the District's vested right to native water, was obliged to consult with FWS. Coordinating its efforts with the Service was a duty that predated the ESA, and the District necessarily submitted itself to FWCA's reach when it amended its contracts in the early 1950s. Contravening the conservancy district's argument that the native water and the Bureau's works must necessarily be viewed as separate elements, the court noted that that water "flows as a consequence of the original federal rescue of the conservancy district. In that process, the wildlife habitat of the Middle Rio Grande has been degraded. Congress has directed the same federal agencies to alleviate that consequence." (228)

Concurring, Judge Seymour supplemented the majority's discretion analysis with an application discussion of the doctrine of 'unmistakable terms': that contractual arrangements, including those to which a sovereign itself is a party, remain subject to subsequent legislation unless waived in express terms. (229) The concurrence agreed that the doctrine's application hinged on whether the "enforcement of the contractual obligation alleged would block the exercise of a sovereign power of the Government." (230)

2. Judge Kelly's Dissenting Opinion

The dissent warned of the uncertainty the ruling would force on the settled expectations of water users by impermissibly expanding the Bureau's obligations under the ESA. (231) Judge Kelly argued that negotiating such contracts did not constitute agency action, thus not triggering section 7's consultation and jeopardy provisions. (232) Because the ESA's implementing regulations require discretionary federal involvement or control, a nondiscretionary action could not trigger the ESA. (233) First, the determination of agency action was a question of timing. Unlike NRDC v. Houston, the SJCP contract negotiations had occurred before the ESA's passage. The discretionary action in NRDC v. Houston was a contract renewal subsequent to ESA enactment and pursuant to specific amendments to the Central Valley Project reclamation law. On the Rio Grande, the dissent noted, no such renegotiation occurred. Merely executing the contracts, without more, did not constitute agency action. (234)

The dissent took a far narrower view of the scope and purpose of the shortage clauses on which the majority had placed so much reliance. (235) Other causes, contended the dissent, surely meant unpredictable, external occurrences, not Bureau-induced shortages. Even if such language conferred discretion on the Bureau, nothing barred curtailment so long as that curtailment was proportional, in keeping with the percentage allocation mandated by the agreement. (236) Therefore, claimed the dissent, the Bureau did not need to breach the contracts as it did in order to deliver water to the minnow. Since the contracts were couched in terms of proportional allocations and not necessarily in terms of firm yield, the Bureau could very well have found its way out of a curtailment thicket by simply reducing the total yield, while respecting the contract terms. (237) The dissent also disagreed with the application of the unmistakable terms doctrine. (238)

Finally, the dissent attacked the court's interpretation of Ninth Circuit case law: O'Neill, Klamath Water Users, and NRDC v. Houston were narrow holdings distinguishable from the case in question. In particular, the dissent relied on the fact that, in both O'Neill and NRDC v. Houston, clear amendments to reclamation law directed the Bureau to reallocate contract water to protect species. (239) The dissent distinguished Klamath Water Users on the grounds that post-ESA renewal negotiations were agency actions under ESA section 7, and agency discretion could not be applied retrospectively. (240) Claiming that the ruling cut against the grain of Supreme Court jurisprudence, the dissent would have narrowly circumscribed the Bureau's role in administering reclamation projects. (241)


Judge Kelly's dissent was undoubtedly correct on at least one point: This case has enormous significance. The Tenth Circuit accurately identified the minnow for what it was: a "measure of the vitality of the Rio Grande ecosystem." (242) By "tipping the balance of hardships and public interest in favor of the protected species," the majority's holding on the substantive law will command significant influence over how reclamation projects are administered. (243) And the stakes were extremely high. This was the first time the ESA had threatened the water supplies of a major metropolitan center. (244) The statute routinely collides with western irrigation interests, yet the ESA itself is blind to the type of use with which it may conflict. (245) While roughly 85 percent of Bureau water nationwide is devoted to irrigation, (246) 83 percent of the West's population lives in urban areas. (247) With Albuquerque planning to install a major treatment plant to facilitate tapping into its full use of SJCP water by the end of 2006, (248) it is understandable that the City so vigorously objected to the ruling. A court-ordered shake-up in the expectations of irrigators, though painful, encompasses a limited scope of social upheaval. A court-ordered stopper to an urban straw creates far worse instability. As the prospect of irrigation-based agriculture in the arid West becomes more uncertain in all but a few locales producing high-value crops, the Silvery Minnow decision and other recent events signal that the crisis between urban growth, scarcity, and the diminishing returns of entrenched irrigation interests is no longer looming--it has arrived. The "Iron Triangle" is looking a lot more square.

Although the majority grounded its decision in a careful analysis of the repayment contracts, the Silvery Minnow court has substantially broadened the basis of agency discretion to take actions to avoid jeopardy to endangered species under ESA section 7. Conferring such breadth of authority on the Bureau (an agency whose expanding role in ESA enforcement has been met with a certain administrative intransigence) will do little to extinguish this and other ESA-water user conflagrations in the parched west. While these conflicts seem to have exhausted themselves in the courts, they remain susceptible to the vicissitudes of politics. While the holding itself constitutes a resounding interpretation of Bureau authority (despite the Bureau's best efforts to relinquish it), the court's reliance on precedent and statute may have been inappropriate. Moreover, the Silvery Minnow court and the Ninth Circuit take an overly broad view of the risk-shifting nature of shortage clauses. As an end result, the Tenth Circuit has implicitly ruled that the ESA, at least on the Rio Grande, acts as a federal reserved instream flow right. In a state with no provision for instream flow, this result represents a further destabilization of the already shaky cooperative federalism of reclamation law.

A. The Court's Reliance on the Ninth Circuit's Emerging Discretion Standard

The Silvery Minnow majority correctly interpreted Ninth Circuit jurisprudence, yet declined to enunciate the clear standard by which that court interprets agency discretion triggering the consultation provisions of ESA section 7(a)(2). The majority used the risk-shifting shortage clauses as a fulcrum to jar loose the Bureau's dormant discretionary control over water delivery contracts negotiated and executed before the ESA was enacted. While the Silvery Minnow opinion adopts a broad interpretation of what constitutes agency action and discretionary control under section 7(a)(2) of the ESA and its implementing regulations that is supported by existing case law, a thorough examination of the suite of Ninth Circuit cases followed by the majority should have persuaded the court to adopt a far clearer standard of discretionary federal control. The Silvery Minnow panel had at its fingertips the tools to construct a stronger holding on the Bureau's discretion, immunizing it from future attack in the Tenth Circuit.

While the dissent pointed to the presence of a specific amendatory act to the reclamation laws in O'Neill as making that case readily distinguishable from Silvery Minnow, (240) it is not apparent that the Ninth Circuit would have held any differently in the absence of the CVPIA. Just prior to O'Neill, the court had ruled in Pacific Rivers Council v. Thomas (Pacific Rivers) (250) that United States Forest Service Land and Resource Management Plans (LRMPs) implemented prior to listing under the ESA of Snake River Chinook salmon constituted ongoing agency actions that governed the issuance of contracts and permits subsequent to the LRMPs' adoption. (251) "Following the Supreme Court's lead in TVA, we have also construed 'agency action' broadly. More importantly, we have recognized that forest management plans have ongoing effects extending beyond their mere approval." (252) The LRMP reserved in the Forest Service the capacity to influence post-listing activities that would affect the listed species, triggering section 7(a)(2)'s consultation requirements. Thus, to survive a Rule 12(b)(6) (253) motion to dismiss for lack of subject matter jurisdiction under the test emerging from Pacific Rivers, plaintiffs must show that the federal action will have an "ongoing and long-lasting effect even after adoption." (254)

Yet the Ninth Circuit knew where to limit TVA's and Pacific Rivers' broad interpretation of federal agency action over which the agency retained discretion. The court took pains in Sierra Club v. Babbitt (255) to circumscribe the limits of actions over which an agency retains discretion. In that case, the court upheld a district court's ruling that a permit issued by the United States Bureau of Land Management (BLM) to a private timber company to begin constructing a road on a right-of-way designated pursuant to a 1962 pre-ESA contractual agreement did not constitute a federal action over which BLM held discretionary control, and thus did not trigger the agency's duty to consult with FWS on impacts to the threatened northern spotted owl (Strix occidentalis caurina). (256) The court distinguished this ruling from its earlier ruling in Pacific Rivers. The right-of-way had been granted prior to the ESA's enactment, and the only reciprocal action remaining (the company's construction of the road), albeit to occur 30 years later, "severely circumscribe[d] the BLM's ability to disapprove of Seneca [Sawmill]'s project." (257) After granting the contract in 1962, BLM was unable to "implement measures that inure to the benefit of the protected species." (258) The agreement, stated the Ninth Circuit, allowed BLM to object to the construction in only three limited circumstances, yet the United States still retained authority to enforce ESA section 9's bar against "taking" listed species. (259) Furthermore, the court recognized, "[t]hrough enactment of subsequent statutory provisions, Congress can modify its contractual obligations and limit the corresponding contractual rights of a private entity." (260)

The Sierra Club court cited O'Neill favorably, emphasizing the Bureau's duty in that case to act each year in delivering water. Thus, the Sierra Club court would have equated O'Neill with Pacific Rivers: The federal agency's discretionary influence over the activity, although arising prior to enactment of the ESA, continues so long as the agency must continue to act in implementing the original plan or agreement. In Sierra Club, BLM's contractual obligation had been fully discharged prior to enactment. No further action bearing on the agreement was required. While the Bureau of Reclamation and the dissent in Silvery Minnow clung doggedly to Sierra Club's language of limitation, both failed to observe that that decision served to clarify O'Neill in light of Pacific Rivers. The test emerging from Sierra Club sweeps in even those actions that fail the ongoing agency action test of Pacific Rivers: Absent ongoing agency action, the agency retains discretionary control if it may still make decisions that "inure to the benefit of the protected species." (261) This represents a narrower test, to be sure, but hardly a disavowal of the ongoing agency action test.

Furthermore, NRDC v. Houston was also decided congruent with Pacific Rivers. The Silvery Minnow dissent attempted to distinguish Houston in that it involved contract renewals as discretionary agency actions. However, under the umbrella of the "ongoing agency action" and continuing discretionary control theories of Pacific Rivers, such a distinction between a renegotiation of a pre-ESA contract and the ongoing performance of that contract by delivering water each year loses much of its force. Performance and negotiation, unless the government has immunized the contract from future legislative changes in unmistakable terms, are still indicative of discretionary federal control adequate to trigger the ESA's consultation provisions. (262)

In its journey through O'Neill and its progeny, the Silvery Minnow majority should have been given pause by at least one recent opinion issued by the Ninth Circuit, cited by both the dissent and the Bureau. In Environmental Protection Information Center v. Simpson Timber Co. (EPIC), (263) the Ninth Circuit rejected EPIC's argument that FWS retained sufficient discretionary control to reinitiate internal consultations regarding the impact of an incidental take permit for the listed spotted owl on two subsequently listed species under ESA section 10(a)(1)(B). (264) The Ninth Circuit refused EPIC's demand that it follow Pacific Rivers, instead likening the failure of the Habitat Conservation Plan (HCP) to reserve discretion for FWS to amend the HCP with new conditions protecting subsequently listed species to the right-of-way agreement in Sierra Club. (265) The court held that the terms of the HCP requiring Simpson to modify silvicultural systems, submit annual reports to FWS for review, and submit to enforcement proceedings upon discovery of a violation of the permit merely granted FWS the authority to enforce or modify the HCP for the benefit of the owl, not subsequently listed species. (266) The EPIC court did supply language in dicta that suggested a narrower application of Houston: Absent an explicit reopener to protect listed species in an agreement with a private party, continuing agency discretion to modify or otherwise alter the agreement does not exist, and thus there is no federal action. (267)

While the state of the law in the Tenth Circuit seems to wholeheartedly adopt the broadest tenets of O'Neill, it is not entirely clear how the Ninth Circuit would resolve Silvery Minnow in light of its subsequent rulings. Under Pacific Rivers, Silvery Minnow would likely have come to the same result if annual contract deliveries can be characterized as implementations of long-term reclamation policy directives. However, under Sierra Club and EPIC, it seems unlikely that the shortage clauses relied upon so heavily by the Tenth Circuit would rise to the level of contract reopeners sufficient to trigger the Bureau's discretion to take action "inuring to the benefit of the protected species." While Ninth Circuit precedent is not binding upon the Tenth Circuit, the Silvery Minnow majority would have done far better to articulate explicitly which test--Pacific Rivers or Sierra Club--it applied in reaching its holding. Taken together, O'Neill, Houston, and Klamath Water Users do not reveal a sustainable test for the Tenth Circuit to adopt as its own binding precedent.

B. The Middle Rio Grande: Not Your Average Integrated Hydrosystem

While correctly decided, the Silvery Minnow ruling may be criticized, not only for its muddy articulation of Ninth Circuit ESA jurisprudence, but for its problematic effort to harmonize reclamation law, state prior appropriation law, and the ESA. One criticism of Silvery Minnow speaks less about the ruling, and more about the sharpening crisis between state prior appropriation doctrine and federal biodiversity protection.

On the one hand, to the Silvery Minnow court, water is water is water: The majority plainly considered the SJCP and Middle Rio Grande to be a fully integrated hydrosystem. This assumption is complicated by the fact that MRGP- and SJCP-authorizing statutes and case law demand the bifurcation of the two elements of the hydrosystem: native, state controlled flow and nonnative, federal flow. This assumption implicitly diminishes the state's control of waters within its borders. Jicarilla recognized fish, wildlife, and recreation to be secondary beneficial uses of stored water in Heron Reservoir. (268) Among the western states, New Mexico is in the small minority of states that do not provide for an instream flow right. (269) In essence, the court enforced an instream flow right under the gloss of a beneficial use for fish and wildlife under state law. This recognition did not attach to water released from the SJCP works. Once instream, this nonnative water's sole purpose was to supplement native flows by providing carriage at the MRGP works. Although the SJCP Act does not expressly prioritize uses to which the Project's water is to be devoted, the Silvery Minnow court disregarded the Tenth Circuit's own interpretation of the statute. Given the Storage Act's express emphasis on consumptive uses, the court may have too easily brushed aside Congress's intent in the SJCP's authorization. Even the legislative fix to the Jicarilla ruling does not address release of SJCP water. The SJCP amendment confines its proviso to "storage of ... water acquired by contract." (270) Moreover, neither the San Juan-Chama Project Act nor the Colorado River Compacts specifically exert the fish and wildlife mandate over released water. Under the doctrine of California v. United States, once water is released from the Project works, it is to be controlled by state law, so long as state water law is not inconsistent with federal reclamation law. (271) In this case, New Mexico law did not conflict with the SJCP's authorizing statutes because federal reclamation law did not authorize the devotion of this water to instream uses. Since New Mexico law does not compel a minimum instream flow, it is not inconsistent with the Reclamation Act or the SJCP Act.

The majority improperly extended the legal veil of SJCP beyond its capabilities, perhaps recognizing that without reclamation law's screening effect, a direct confrontation between the ESA and state water law was to be avoided. In effect, like so many courts before it, the Tenth Circuit panel implicitly interpreted the ESA to be a federal reserved instream flow right. While this is an effective conclusion that may make sense for species in the river, it is clearly contrary to both the ESA and New Mexico state water law. In short, the court delicately avoided a no man's land created by diametrically opposed mandates. Using the SJCP Act and an expansive reading of the repayment contracts as a legal buffer, the Silvery Minnow court attempted to sidestep the collision between a federal reserved instream species protection flow and state water law that does not recognize an instream right.

On the other hand, the Silvery Minnow court correctly predicated its holding on the distinction between the legal status of waters native to the streams in which they naturally flow and water released pursuant to a federal project. (272) This holding is warranted based on the understanding that project water is not like water naturally flowing in the stream. Courts have routinely made this distinction. (273) In particular, the Tenth Circuit properly upheld the district court's second order directing that additional water for the minnow may be found by restricting District diversions of MRGP water. (274) And it did so while respecting state water law. Under the Reclamation Act, a water user must limit its use of federal project water to that reasonably needed for beneficial use. (275) Beneficial use is determined under New Mexico law. (276) New Mexico prohibits the wasting of surface water appropriated under priority. (277) While the New Mexico District Court declined to determine whether the District was wasting water, it observed that the Bureau has a statutory duty to determine whether the District was wasting water in violation of both federal and state law. (278) If the Bureau finds that excessive diversions are occurring, it must step into the shoes of the state to enforce the beneficial use of federal project water. (279)


By July 4, 2003, the river had yet again run dry through the minnow's critical habitat in the San Acacia reach. And, as in years past, FWS personnel patrolled the river, scooping out minnows from isolated pools to transport them to safety. (280) The irony was palpable: Following a stunning victory before the Tenth Circuit, environmentalists were forced to watch the river run dry as the Bureau conformed with its legal duties under the revised September 2002 BiOp, which had survived the Tenth Circuit's ruling, allowing portions of the critical habitat reach to run dry below the District's San Acacia diversion. The Bureau, however, avoided the most controversial step imposed by the District Court's preliminary injunction and order: (281) cutting off irrigators.

The reaction to the Tenth Circuit's ruling was swift. Environmentalists hailed the court's opinion as a step in the right direction, affirming the Bureau's duties under the ESA and catalyzing tough new measures on water users. Water users, the State, and politicians decried the court's ruling as unsettling long-held expectations by taking state water rights. At one point, Albuquerque Mayor Martin Chavez warned that the Tenth Circuit was taking water "from the mouths of [Albuquerque's] children." (282) The political reaction rumbled on three fronts: judicial appeals, the invocation of the Endangered Species Committee (the "God Squad"), and legislative action to overturn the ruling.

A. The Legislative Response: The Domenici-Bingaman Rider

Three legislative options were initially considered: amending the ESA to prevent use of one river's water to mitigate danger to a species in another river, thereby exempting the City's share of the SCJP water from minnow protection requirements; conveying title to the water to the City; and legislation specifying that the Secretary has no discretion to curtail contracted deliveries. (283) The latter option ultimately won out. The Tenth Circuit's ruling on the Bureau's discretion to curtail water deliveries to the City and District from the SJCP was foreseeably short-lived. But it helped force a broader issue. As an urban economy and population base supplant agriculture as the West's preeminent economic driver, who will allocate the West's water? (284)

Department of the Interior policy objectives aside, the answer, at least in the case of the San Juan-Chama Project, seems to be Congress, not the courts. Providing a quick fix to the Tenth Circuit's ruling and helping Mayor Chavez and Albuquerque's thirsty children sleep easier at night, the FY 2004 Energy and Water Appropriations Development Act (285) now contains language expressly stripping the Bureau of discretion to reallocate SJCP water. (286) Appropriations bills authorize expenditures by the federal government on an annual basis. Riders are mandates or conditions imposed on the appropriations bills that identify and approve funding from the federal government. (287) Riders on appropriations bills in the environmental context are nothing new, and their use in the mid-1990s to temporarily relax environmental review of certain salvage logging projects on federal lands, (288) allow oil and gas drilling in Alaska's Arctic National Wildlife Refuge, (289) and halt listing of endangered species and critical habitat designation (290) has been a source of significant controversy. Appropriations bills and their riders are often used to revise or adjust prior substantive legislation, seldom receiving the depth of deliberative debate substantive policy making entails. (291) While the Domenici-Bingaman rider purported to halt the involuntary curtailment of SJCP deliveries to aid the minnow, and signaled that the March 2003 BiOp was the law of the river, its legal effects are still uncertain. After all, such appropriations bills are of limited duration. The Domenici-Bingaman rider, while lauded by the City of Albuquerque, is at best a stopgap measure.

B. Judicial Appeals

The State, the City, and the District initially considered three potential judicial remedies to the ruling to have emerged in the aftermath: an en banc rehearing by the Tenth Circuit, an appeal to the United States Supreme Court, and a possible Fifth Amendment takings claim before the Court of Federal Claims. (292) Governor Bill Richardson and Mayor Chavez met in Washington with Secretary of the Interior Gale Norton to urge the federal government to stay out of any appeal. (293) On the administrative front, Mayor Chavez and Governor Richardson did make overtures regarding invocation of the Endangered Species Committee to exempt the minnow from ESA protection. (294) At Senator Jeff Bingaman's urging, Governor Richardson met with Secretary Norton to consider the option. (295) However, a formal request had been put on hold in order to let the appeals process play out. (296)

And play out it did. All defendants and intervenors petitioned for rehearing en banc by the Tenth Circuit. The panel requested briefing on the issue of whether the case was moot and should be vacated. On January 6, 2004, the same panel of the Tenth Circuit declared that the preliminary injunction issued by the District Court moot and the Silvery Minnow opinion vacated. (297) The State and the City of Albuquerque finally achieved their goal of ridding the Tenth Circuit of Silvery Minnow's formal precedent. The court found that all provisions of the preliminary injunction had been met or were never invoked by the December 31, 2003 deadline. (298) Most importantly, the Bureau had not needed to invoke the controversial provision of Judge Parker's ruling in Order II directing the Bureau to reduce contract deliveries to comply with the June 29, 2001 BiOp. (299) Because rain fell and the Bureau managed to cobble together enough willing sellers to part temporarily with their water at the tail end of the 2003 irrigation season, the court no longer had a live controversy for which it could grant relief. (300) The appeal for rehearing having been mooted, the court vacated the Silvery Minnow opinion. The court reasoned that the mootness of the case was not the result of any act of the appellants, but rather from circumstances beyond the parties' control--namely, favorable climatic conditions, the finite duration of the preliminary injunction, and the Domenici-Bingaman Rider. (301) Finally, the court declined to order the District Court to vacate its injunctive order. (302)

While the City of Albuquerque hailed the decision to vacate the opinion, and clearly found solace in the knowledge that, upon reconsideration, the District Court will face the Domenici-Bingaman rider taking SJCP water off the table, the underlying dispute still simmers. (303) While the recent order to vacate provides short-term certainty regarding Albuquerque's water supply, the issue of Bureau discretion still lingers, especially if conditions in the river worsen in subsequent years. Governor Bill Richardson characterized the vacatur as critical leverage to force the parties to agree on "a comprehensive solution based on water rights owners and the ecosystem." (304) The Silvery Minnow vacatur terminated only the challenges raised in the District Court, and did not foreclose new questions to be addressed in further litigation. (305)

C. Silvery Minnow's Durability: Forcing Proactive Approaches to the Bureau's Responsibility

With the Domenici-Bingaman rider in place for the short term and the proceedings before the Tenth Circuit concluded, it is clear that the stakeholders on the Middle Rio Grande will have to attack the issue together to fred the necessary "give" in the system. While the Silvery Minnow holding that the Bureau retains discretion to unilaterally reallocate water secured under contract to boost flows in the Middle Rio Grande has not survived the appropriations process, and its force as precedent has flagged, the court's conclusion will influence other courts in similar cases. And, as previously noted, the Supreme Court has thus far been uninterested in revisiting such disputes by granting certiorari (306) Environmental plaintiffs now have persuasive leverage in using the Tenth Circuit's broader scope of federal agency action and continuing discretion triggering ESA section 7(a)(2) and broad interpretation of the plain terms of water repayment contracts. The Bureau now must grapple with the possibility that risk-shifting shortage clauses limiting the government's liability during times of drought will be construed broadly by the two circuits in which it operates. Although no longer bound by Silvery Minnow as precedent, the Tenth Circuit's adoption of Ninth Circuit reasoning clearly indicates that the law in both circuits is solidifying. Plaintiffs now need only show that the Bureau's annual performance of water delivery obligations under pre-ESA contracts represents ongoing agency action having a long-lasting effect on listed species in the nature of a comprehensive management plan. Alternatively, plaintiffs can successfully argue that shortage clauses represent reopeners sufficient to invoke the Bureau's authority to take action inuring to the benefit of a listed species to survive summary judgment. On a basic level, Silvery Minnow could likely sustain both tests. Because O'Neill and its progeny have been followed in the Tenth Circuit, these shortage clauses will be given significant weight in defining the parameters of the Bureau's duties to conserve listed species.

The Silvery Minnow dispute signals the latest chapter in the struggle over the Reclamation Act's fragile scheme of cooperative federalism. Appropriations riders appear poorly equipped to afford long-term protection to traditional state control over water resources. Instead of a frontal assault on the ESA, the Domenici-Bingaman rider chooses to preserve political capital by making ad hoc adjustments to SJCP operations that are so local in effect as to fly below the radar in the appropriations conference committee process. It is critical, despite the ongoing litigation, that the Bureau take a proactive approach to finding additional water in the system--a highly mechanized water delivery system which the federal government quite clearly controls.

(1) J.B. Ruhl, Who Needs Congress? An Agenda for Administrative Reform of the Endangered Species Act, 6 N.Y.U. ENVTL. L.J. 367, 384 (1998).

(2) Endangered Species Act of 1973, 10 U.S.C. [subsection] 1531-1544 (2000).

(3) 333 F.3d 1109 (10th Cir. 2003), vacated, 355 F.3d 1215 (10th Cir. 2004).

(4) Circuit Judge Kelly, a Reagan appointee, likened the ESA to Frankenstein, Mary Shelley's tortured creation, because "despite the good intentions of its creators, [the ESA] has become a monster." Id. at 1158 (Kelly, J. dissenting).

(5) Chair and Ranking Member, respectively, on the Senate Committee on Energy and Natural Resources.

(6) For an explanation of how appropriations riders have affected the implementation of federal environmental statutes, see Michael Axline, Forest Health and the Politics of Expediency, 26 ENVTL. L. 613, 613 n.2 (1996) (defining a "rider" as substantive legislation that "ride[s]" on the back of an appropriations bill when rules of both houses of Congress generally prohibiting riders are periodically suspended).


(8) 657 F.2d 1126 (10th Cir. 1981). The court found that 93% of SJCP water speculatively stored in Elephant Butte was lost to evaporation. Id. at 1134.

(9) Act of December 29, 1981, Pub. L. No. 97-140, [section] 5, 95 Stat. 1717.

(10) Another significant dispute involves farmers dependent on irrigation deliveries from the Bureau's Klamath Project in southwestern Oregon and northern California and the water needs of endangered salmon and sucker fish, as well as tribal water claims. See generally Matthew G. McHenry, Comment, The Worst of Times: A Tale of Two Fishes in the Klamath Basin, 33 ENVTL. L. 1019 (2003) (discussing water allocation in the Klamath Basin of Southern Oregon).

(11) See NEW MEXICO DEP'T OF ECON. DEV., NEW MEXICO COMMUNITIES, at (Albuquerque Demographics) (last visited Nov. 14, 2004) (analyzing 2000 U.S. Census data). From 1990 to 2000, Albuquerque experienced 16.6% population growth. Id. Bernalillo County, in which the greater Albuquerque metropolitan area lies, generally tracks this growth rate. Id.

(12) See generally DANIEL MCCOOL, COMMAND OF THE WATERS: IRON TRIANGLES, FEDERAL WATER DEVELOPMENT, AND INDIAN WATER (1987) (discussing the traditional sources of political power in general policy making).

(13) Endangered and Threatened Wildlife and Plants; Final Rule Listing the Rio Grande Silvery Minnow as an Endangered Species, 59 Fed. Reg. 36,988 (July 20, 1994) (to be codified at 50 C.F.R. pt. 17).

(14) Jon A. Souder, Chasing Armadillos Down Yellow Lines: Economics in the Endangered Species Act, 33 NAT. RESOURCES J. 1095, 1098 (1993) (characterizing minnows as "uncharismatic microfauna").

(15) 59 Fed. Reg. at 36,988.

(16) Id.; Sean O'Connor, Comment, The Rio Grande Silvery Minmow and the Endangered Species Act, 73 U. COLO. L. REV. 673, 676 (2002).

(17) Joan E. Drake, Comment, Contractual Discretion and the Endangered Species Act: Can the Bureau of Reclamation Reallocate Federal Project Water for Endangered Species in the Middle Rio Grande?, 41 NAT. RESOURCES J. 487, 490 (2001).

(18) O'Connor, supra note 16, at 738. Under the doctrine of prior appropriation of water resources, the problem of overappropriation arises when the total amount holders' legal rights recognized at state law to set allocations of water ("paper rights") exceed the actual amount of surface water flowing in a stream. See generally JOSEPH L. SAX ET AL., LEGAL CONTROL OF WATER RESOURCES 147 (2d ed. 1991) (discussing often inflated water rights granted in general stream adjudication).

(19) O'Connor, supra note 16, at 678.

(20) Denise D. Fort, Restoring the Rio Grande: A Case Study in Environmental Federalism, 28 ENVTL. L. 15, 20-22 (1998).

(21) Id. at 22.

(22) O'Connor, supra note 16, at 680.

(23) Act of June 17, 1902, ch. 1093, 32 Stat. 388 (1902) (codified as amended at 43 U.S.C. [subsection] 371-431 (2000)).

(24) 43 U.S.C. [section] 373a (2000).

(25) See United States v. Tulare Lake Canal Co., 535 F.2d 1093, 1119 (9th Cir. 1976) (observing that the reclamation program was intended "to create family-sized farms in areas irrigated by federal projects ... to secure the wide distribution of the substantial subsidy involved in reclamation projects and [to] limit private speculative gains resulting from the existence of such projects"); Reed. D. Benson, Whose Water is It? Private Rights and Public Authority Over Reclamation Project Water, 16 VA. ENVTL. L.J. 363, 365 (1997) (describing the social policies fostered by the reclamation program); Peter M. Lacy, The Irrigated Desert and Imperiled Salmon: "Reclaiming" Illegally Spread Water Via the Endangered Species Act, 4 U. DENV. WATER L. REV. 351, 360 (2001) (recounting the political, economic, and social motivations for the Reclamation program).

(26) Desert Lands Act of 1877, ch. 107, [section] 1, 19 Stat. 377 (1877) (codified as amended at 43 U.S.C. [subsection] 321-329 (2000)).

(27) Lacy, supra note 25, at 360.

(28) 43 U.S.C. [section] 375 (2000).

(29) See generally Paul S. Taylor, Excess Land Law.. Calculated Circumvention, 52 CAL. L. REV. 978 (1964).

(30) U.S. BUREAU OF RECLAMATION, WATER SPREADING (March 3, 1994) (on file with author); Reed D. Benson & Kimberley J. Priestly, Making a Wrong Thing Right." Ending the "Spread" of Reclamation Project Water, 9 J. ENVTL. L. & LITIG. 89, 92 (1994). As a means to combat the practice, Congress in 1982 amended the Reclamation Act, expanding the limit to 960 acres and requiring landowners who exceeded that new limit to pay the "full cost" of the otherwise subsidized Bureau water. Reclamation Reform Act of 1982, Pub. L. No. 97-293, 96 Stat. 1263 (1982) (codified at 43 U.S.C. [subsection] 390aa-390zz-1).

(31) Reclamation Reform Act of 1982, Pub. L. No. 97-293, 96 Stat. 1263 (1982) (codified at 43 U.S.C. [section] 390ee).

(32) Lacy, supra note 25, at 360.

(33) Id. at 361; Benson, supra note 25, at 366.

(34) U.S. BUREAU OF RECLAMATION, FACTS AND INFORMATION, at (last visited Nov. 14, 2004).

(35) 43 U.S.C. [section] 383 (2000).

(36) William H. Holmes & Gale L. Achterman, Bureau of Reclamation Contract Renewal and Administration: When Is a Contract Not a Contract? 41 ROCKY MTN. MIN. L. INST. 23-1, 23-4 (1995).

(37) Id. Water service contracts are authorized pursuant to section 9(e) of the 1939 Reclamation Project Act. 43 U.S.C. [section] 485h(e) (2000).

(38) Benson, supra note 25, at 371; Holmes & Achterman, supra note 36, at 23-4. Repayment contracts are authorized pursuant to section 9(d) of the 1939 Reclamation Project Act. 43 U.S.C. [section] 485h(d)(2000). Benson analogizes repayment contracts to a mortgage, and water service contracts to a lease. See Benson, supra note 25, at 371.

(39) California v. United States, 438 U.S. 645, 650 (1978).

(40) See 43 U.S.C. [section] 383 (2000). The statute reads, in pertinent part,
   Nothing in this Act shall be construed as affecting or intended to
   affect or to in any way interfere with the laws of any State ...
   relating to the control, appropriation, use, or distribution of
   water used in irrigation, or any vested right acquired
   thereunder ... [T]he Secretary of the Interior, in carrying out the
   provisions of this Act, shall proceed in conformity with such laws.


(41) Id. [section] 372.

(42) Prior appropriation can be characterized as a system recognizing rights vesting in water users, regardless of their property's proximity to the watercourse, who 1) demonstrate an intent to appropriate water, 2) divert available water, and 3) apply that water to beneficial use as defined by the State. A. DAN WARLOCK ET AL., WATER RESOURCE MANAGEMENT: A CASEBOOK IN LAW AND PUBLIC POLICY 162 (5th ed. 2002). Appropriators' rights to draw on their claimed amount are thus established based on temporal priority--"first in time, first in right." New Mexico adheres to the doctrine, as do the majority of western states, enshrining prior appropriation in its state constitution: "The unappropriated water of every natural stream, perennial or torrential, within the state of New Mexico, is hereby declared to belong to the public and to be subject to appropriation for beneficial use, in accordance with the laws of the state. Priority of appropriation shall give the better right." N.M. CONST. art. XVI, [section] 2.

(43) See California, 438 U.S. at 651-52 (in general, federal reclamation law requires deference to state water law in the acquisition and disbursement of water).

(44) See Joseph L. Sax, Problems of Federalism in Reclamation Law, 37 U. COLO. L. REV. 49, 51-57 (1965) (discussing federal control of distribution of project water to users, and the Supreme Court's treatment of the [section] 8 deference question). In Ivanhoe Irrigation District v. McCracken, 357 U.S. 275 (1958), the Supreme Court held that state water laws did not necessarily supercede directly conflicting provisions of federal reclamation law, despite the policy of deference enunciated in [section] 8. Id. at 291-94. The Iwanhoe Court reversed a California Supreme Court decision that the 160-acre limit on parcels receiving project water was counter to state law, and that [section] 8 should control. In City of Fresno v. California, 372 U.S. 627 (1963), the Court held that California laws granting a preference for municipal uses over agricultural uses were preempted by a provision in the Reclamation Act containing specific preference for irrigation. Id. at 630-31; see 43 U.S.C. [section] 485h(c) (2000) (barring contracts to deliver municipal water from Reclamation projects that, in the judgment of the Secretary of the Interior, would impair the efficiency of the project for irrigation purposes). See also Arizona v. California, 373 U.S. 546, 586-87 (1963) (opining that the Secretary must not be bound by state law in disposing of water under the Reclamation Act).

(45) 438 U.S. at 670-675. California was decided on the same day as United States v. New Mexico, 438 U.S. 696 (1978), which held that the United States had not reserved instream flows in the Gila River for fish and recreation when it withdrew the Gila National Forest from the public domain. Id. at 697-98. The Court's controversial ruling upheld a New Mexico Supreme Court decision giving a substantially limited interpretation to the purposes for which Congress established the national forests. See generally Sally K. Fairfax & A. Dan Tarlock, No Water for the Woods: A Critical Analysis of United States v. New Mexico, 15 IDAHO L. REV. 509, 526-27 (1979) (arguing that the majority in United States v. New Mexico interpreted the Reclamation Act too narrowly).

(46) California, 438 U.S. at 651.

(47) Id. at 678.

(48) Id. at 679. On remand, the Ninth Circuit stated that a state condition on federal management or control of a reclamation project was valid unless it "clashe[d] with express or clearly implied congressional intent or works at cross-purposes with an important federal interest." United States v. California State Water Resources Control Bd., 694 F.2d 1171, 1177 (9th Cir. 1982). On remand, the Bureau failed to present evidence that any of California's contested permit conditions would harm or frustrate the purposes of the project. Id. at 1181.

(49) See Holmes & Achterman, supra note 36, at 23-27 (observing that the Bureau must have some sort of congressional authorization when it insists on a contract amendment).

(50) Id.

(51) Id.; See also Peterson v. United States Dep't of the Interior, 899 F.2d 799, 808 (9th Cir. 1990) (concluding that Congress need not expressly reserve in the controlling statute the right to amend the statute or governmental contracts entered under it); Madera Irrigation Dist. v. Hancock (Madera), 985 F.2d 1397, 1400 (9th Cir. 1993) (finding that, where statute required increased operation and maintenance costs, the Bureau could implement these changes unilaterally in contract renegotiations); Israel v. Morton, 549 F.2d 128, 132 (9th Cir. 1977) (holding that an amendment to the Columbia Basin Project Act approved a necessary change in excess land contracts).

(52) 985 F.2d at 1400.

(53) National Environmental Policy Act of 1969, 42 U.S.C. [section] 4321-4370e (2000).

(54) 16 U.S.C. [section] 1536 (2000). For further information on ESA section 7 and the interagency consultation requirement, see infra Part III.A.

(55) Madera, 985 F.2d at 1403.

(56) Id. at 1401; see also Barcellos & Wolfsen, Inc. v. Westlands Water Dist., 899 F.2d 814, 821-25 (9th Cir. 1990) (holding that, while a limited compensable property right in federal contract water deliveries may be recognized, an irrigator has a heavy burden of demonstrating the right's abrogation by federal curtailment), amended by 1990 U.S. App. LEXIS 9347 (9th Cir. 1990).

(57) 50 F.3d 677 (9th Cir. 1995).

(58) Id. at 682-84. For a summary of the case, see Lisa L. Nguyen, O'Neill v. United States: Endangered Species Act and Central Valley Project Improvement Act Can Invoke Contract Clause That Limits Liability Due to Water Shortages, 16 J. ENERGY NAT. RESOURCES & ENVTL. L. 201 (1996) (reviewing O'Neill and potential effects on water service contracts).

(59) O'Neill, 50 F.3d at 681.

(60) Id. at 686.

(61) Barcellos & Wolfsen, Inc. v. Westlands Water Dist., 849 F. Supp. 717, 733 (E.D. Cal. 1993), aff'd sub nom. O'Neill v. United States, 50 F.3d 677 (9th Cir. 1995); see also United States v. Glenn-Colusa Irrigation Dist., 788 F. Supp. 1126, 1134 (E.D. Cal. 1992) (holding that state water rights to a specific method of appropriator's diversion do not prevail over the requirements of the ESA).

(62) Central Valley Project Improvement Act, Pub. L. No. 102-575, 106 Stat. 4706 (1992) (not codified).

(63) O'Neill, 50 F.3d at 686.

(64) 146 F.3d 1118 (9th Cir. 1998).

(65) Id. at 1126.

(66) Id.

(67) Id. at 1125; see also Pacific Rivers Council v. Thomas, 30 F.3d 1050, 1054 (9th Cir. 1994) ("[T]here is little doubt that Congress intended to enact a broad definition of agency action in the ESA.").

(68) 204 F.3d 1206 (9th Cir. 2000). In this case, the Bureau held fee title to the dam and water rights under Oregon law. Id. at 1213. For a more detailed discussion of federal agencies' duties under the ESA under the discretionary involvement regulations, see infra Part III.

(69) Id. at 1213.

(70) Id. at 1209 (internal quotations omitted).

(71) Id. at 1210.

(72) Id. at 1213.


(74) At one time, the Navajo River sustained a profitable recreational native trout fishery on the Jicarilla Apache reservation. For a brief yet eloquent and unsettling history of the Jicarilla Apaches' fight to assert their rights to these waters, see CHARLES F. WILKINSON, CROSSING THE NEXT MERIDIAN: LAND, WATER, AND THE FUTURE OF THE WEST 219-31 (1992).

(75) Drake, supra note 17, at 491.

(76) Pub. L. No. 87-483, 76 Stat. 96 (1962) (codified at 43 U.S.C. [section] 620a (2002)).

(77) Ch. 203, 70 Stat. 105 (1956) (codified as amended at 43 U.S.C. [subsection] 620-620o (2000)).

(78) 43 U.S.C. [section] 620 (2000).

(79) Id.

(80) San Juan-Chama Project Act [section] 8, 76 Stat. at 97-98.

(81) See Contract Between the United States of America and the City of Albuquerque, New Mexico, for Furnishing a Municipal Water Supply, Contract No. 14-06-500-810, June 25, 1963, pmbl. [hereinafter City Contract] (on file with author); Amendatory Contract between the United States of America and the Middle Rio Grande Conservancy District, New Mexico, Contract No. 178r-423 Amendment No. 4, June 25, 1963, pmbl. (amending the original 1951 Repayment Contract) [hereinafter District Contract] (on file with author).

(82) City Contract, supra note 81, art. 18dj; District Contract, supra note 81, art. 18d.

(83) Drake, supra note 17, at 491 n.12. An acre-foot is the volume of water necessary to cover one acre under twelve inches of water.

(84) Id. at 506.

(85) Id.

(86) City Contract, supra note 81, art. 18b; District Contract, supra note 81, art. 12b.

(87) City Contract, supra note 81, art. 18h; District Contract, supra note 81, art. 12h.

(88) Albuquerque is not the only New Mexico city whose fortunes rest on delivery of SJCP water; Las Cruces, one of the fastest growing cities in the country, also depends on SJCP deliveries to supplement its groundwater drafts. Holly Doremus, Water, Population Growth, and Endangered Species in the West, 72 U. COLO. L. REV. 361, 371 (2001).

(89) Boulder Canyon Project Act, ch. 42, 45 Stat. 1057 (1928) (codified as amended at 43 U.S.C. [section] 617 (2000)).

(90) Indeed, authorization of the SJCP was a drama all its own. History has since revealed that New Mexico and its neighbors, in their efforts to block the tremendous pressure exerted by California--in particular, the City of Los Angeles---to snare the lion's share of the Colorado River's flow, were acutely aware of the compelling claims to the Colorado Basin's water resources held by the Jicarilla Apache and the Navajo Tribes under the doctrine of Winters v. United States, 207 U.S. 564 (1908) (holding that Congress, in reserving the Fort Belknap Indian Reservation, impliedly guaranteed the Tribes an amount of water sufficient to fulfill the agricultural and assimilative purposes of the reservation). Professor Charles Wilkinson asserts that the SJCP's authorization came largely on the back of authorization of the Navajo Indian Irrigation Project (NIIP). In a sleight of hand that embitters the Tribes to this day, the NIIP remains largely undeveloped, while the SJCP moved swiftly from authorization to appropriation to construction, "wrapped in the Indian blanket, while the Navajos were left with an ill-fitting suit of clothes." WILKINSON, supra note 74, at 228-29.


(92) Id.

(93) Id. at 7.

(94) Id. at 13, 36. In addition, the City has moved to implement effective conservation strategies that involve protection of existing groundwater resources, reuse, negotiation for acquisition agreements with the District, integration with comprehensive land-use planning, and the construction of new impoundments. It would be disingenuous to assert that the City has merely retreated to a litigation position of intransigence regarding minnow protection. During the protracted ESA litigation, the City helped instigate a collaborative workgroup composed of federal, state, and local agencies, irrigators, and environmentalists to negotiate a solution to the problem. See DRAFT COOPERATIVE MANAGEMENT AGREEMENT ESTABLISHING THE MIDDLE RIO GRANDE ENDANGERED SPECIES ACT COLLABORATIVE PROGRAM 1 (May 25, 2000) (on file with author); see also Kara Gillon, Watershed Down?: The Ups and Downs of Watershed Management in the Southwest, 5 U. DENV. WATER L. REV. 395, 423 (2002) (describing formation of the workgroup).

(95) Fort, supra note 20, at 24.

(96) Jicarilla, 657 F.2d 1126, 1131 (10th Cir. 1981).

(97) Jicarilla Apache Tribe v. United States, 601 F.2d 1116, 1119 (10th Cir. 1979).

(98) Id.

(99) Jicarilla, 657 F.2d at 1131.

(100) Id.

(101) Id. at 1133-34. The defendant-intervenors New Mexico and Albuquerque based this argument on prior Supreme Court decisions, e.g., California v. United States, 438 U.S. 645 (1978), discussed supra Part II.B, which held that a state may control distribution of water in a reclamation project in a manner that is not inconsistent with clear congressional directives respecting the project.

(102) Jicarilla, 657 F.2d at 1135.

(103) Id. at 1136.

(104) Id. at 1135.

(105) Id. at 1133; see also State ex. rel. Erickson v. McLean, 308 P.2d 983, 987-89 (N.M. 1957) (declaring that actual consumptive use, not the mere priority and extent of appropriation, to be the measure of a water right).

(106) Jicarilla, 657 F.2d at 1137-38.

(107) Id. at 1136-45.

(108) The court stated,
   [M]erely changing the name of the plan does not alter the
   overwhelmingly obvious and undisputed fact that the water is
   intended to be used by Albuquerque for recreation. It does not
   follow from the fact that Albuquerque is a municipality that every
   use to which it puts the water thereby becomes a municipal use.
   The Congressional limitations on beneficial use cannot be so
   easily avoided.

Id. at 1136.

(109) In pertinent part, section reads,
   Nothing in this Act shall be construed as affecting or intended to
   affect or to in any way interfere with the laws of any State or
   Territory relating to the control, appropriation, use or
   distribution of water used in irrigation, or any vested right
   acquired thereunder, and the Secretary of the Interior, in
   carrying out the provisions of this Act, shall proceed in
   conformity with such laws.

43 U.S.C. [section] 383 (2000).

(110) The court stated,
   [I]t is clear that Congress can and generally does restrict the
   uses to which water ... from federal reclamation projects can be
   applied. From the early years of reclamation projects, state law
   has governed only as to use, allocation and distribution among
   water users seeking to utilize water for congressionally
   recognized purposes.

Jicarilla, 657 F.2d at 1138.

(111) Id. at 1137.

(112) Id. at 1138 (citing 43 U.S.C [section] 485h; City of Fresno v. State of California, 372 U.S. 627 (1963)).

(113) Id. at 1139.

(114) Id.

(115) Id. (emphasis added).

(116) The Jicarilla Court concluded,
   [T]he principal uses of the San Juan-Chama water are to be
   municipal domestic, industrial and irrigation. True, it expresses
   the intention that the water provides recreation and fish and
   wildlife benefits. It is plain, however, that such benefits are
   not intended to be primary purposes, but, rather, incidental ones.


(117) The SJCP Act reads in pertinent part,
   The proviso [that the principal purpose of 43 U.S.C. [section]
   620a prioritizing irrigation, municipal, domestic, and industrial
   use] shall not be construed to prohibit the storage of San
   Juan-Chama Project water acquired by contract ... in any reservoir,
   including the storage of water for recreation and other beneficial
   purposes by any party contracting with the Secretary for project

Pub. L. 97-140, [section] 5, 95 Stat. 1717 (1981).

(118) O'Connor, supra note 16, at 689. Acequias are historic community irrigation ditch systems for apportioning and distributing water instituted by early Hispanic settlers. WILKINSON, supra note 74, at 273.

(119) O'Connor, supra note 16, at 689. The District appropriates water from the Middle Rio Grande under two permits from the state engineer--one to irrigate 80,785 acres and another to irrigate 42,482 acres with main stem water. MIDDLE RIO GRANDE CONSERVANCY DIST., WATER POLICIES PLAN 4, 51 (1993).

(120) In re Rio Grande Conservancy Dist., No. 14,157 (D.N.M. Aug. 26, 1925) (on file with author); see Lisa D. Brown, The Middle Rio Grande Conservancy District's Protected Water Rights: Legal, Beneficial, or Against the Public Interest in New Mexico?, 40 NAT. RESOURCES J. 1, 5 (2000) (describing the early history of the District).

(121) Conservancy Act of New Mexico, 1923 N.M. Laws 140 (codified at N.M. STAT. ANN. [subsection] 73-14-1 (Michie 1978)).

(122) Id; Brown, supra note 120, at 4. Brown observes that the petition for formation was approved by only 148 large agricultural landowners and Albuquerque developers (the City being included within the bounds of the District), with the majority of smaller operators refusing to sign. Id. The District Court's order in 1925 laid out the following purposes for the District's formation:
   [T]o regulate the stream channels of the Rio Grande and Rio Chama
   and to regulate the flow of said streams ... and thereby to reclaim
   drain, or fill the wet and overflowed lands and to protect public,
   municipal and private property from inundation and injury; and to
   reclaim and irrigate the arid and unproductive lands adjacent to
   said rivers....

In re Rio Grande Conservancy Dist., No 14,157, slip op. at 2 (D.N.M. Aug. 26, 1925).

(123) Brown, supra note 120, at 6. Brown notes that the majority of farmers within the district were vehemently opposed to its formation, worried about their ability to pay these assessments. Id.

(124) Tim De Young, Searching for the Milagro Beanfield. The Politics of Surface Water Management in New Me, co, PUB. SERVICE, August 1981, at 1, 2.

(125) In re Proposed Middle Rio Grande Conservancy Dist., 242 P. 683 (N.M. 1925).

(126) O'Connor, supra note 16, at 689.

(127) Congress approved the MRGP under the Flood Control Acts of 1948 and 1950. 33 U.S.C. [subsection] 701s, 701f-2 (2000).


(129) Laird J. Lucas, State Admin. and Bureau of Reclamation Contracts for Irrigation--Hasta la Vista Baby!: Rio Grande Silvery Minnow v. Keys, 2004 A.B.A. SEC. ENV'T, ENERGY, AND RESOURCES 55, 59.

(130) Silvery Minnow, 333 F.3d 1109, 1135 (10th Cir. 2003). This allocation is referred to as "non-native" flow, as opposed to "native" water naturally flowing in the river. The legal distinction was raised by the District, and is discussed infra Part III.E.

(131) Id. at 1115.

(132) 16 U.S.C. [section] 1531(c)(1) (2000).

(133) Id. [section] 1536(a)(1). For example, the Ninth Circuit has recognized the Bureau's mandatory "duty to conserve" listed species in Carson-Truckee Water Conservancy District v. Clark, 741 F.2d 257 (9th Cir. 1984). In that case, the court found that section 7(a)(1) and other provisions of the ESA "direct that the Secretary actively pursue a species conservation policy." Id. at 262.

(134) 16 U.S.C. [section] 1536(a)(2) (2000).

(135) 50 C.F.R. [section] 402.02 (2003).

(136) 437 U.S. 153 (1978).

(137) Id. at 173.

(138) Id.

(139) Id. at 194 ("Congress has spoken in the plainest of words, making it abundantly clear that the balance has been struck in favor of affording endangered species the highest of priorities, thereby adopting a policy which it described as 'institutionalized caution.'").

(140) 50 C.F.R. [section] 402.14 (2003).

(141) 16 U.S.C. [section] 1536(c)(1) (2000).

(142) In a situation involving an endangered species found upon the high seas, the consulting agency is the National Oceanic and Atmospheric Administration (NOAA Fisheries). Since FWS is the appropriate agency for the minnow consultation, it will be referred to throughout this Note, but the consultation requirements for NOAA Fisheries under section 7 are the same. 50 C.F.R. [section] 402.14 (2003).

(143) 16 U.S.C. [section] 1536(d) (2000).

(144) Id. [section] 1536(a)(2), (b)(3)(A) (2003).

(145) Id. [section] 1536(b)(4).

(146) 50 C.F.R. [section] 402.16 (2003).

(147) Id. [section] 402.03.

(148) Sierra Club v. Babbitt, 65 F.3d 1502, 1508-09 (9th Cir. 1995) (declaring that, without discretionary control by the action agency, "consultation would be a meaningless exercise; the agency simply does not possess the ability to implement measures that inure to the benefit of the protected species").

(149) 50 C.F.R. [section] 402.16 (2003).

(150) See United States v. Glenn-Colusa Irrigation Dist., 788 F. Supp. 1126, 1134 (E.D. Cal. 1992) (holding that state water rights to a specific method of appropriator's diversion do not prevail over the requirements of the ESA).

(151) 741 F.2d 257, 262 (9th Cir. 1984).

(152) Id.

(153) 758 F.2d 508, 513 (10th Cir. 1985).

(154) See O'Connor, supra note 16, at 717-18 (discussing the court's decision).

(155) Id.

(156) Id.

(157) 174 F.3d 1178 (10th Cir. 1999).

(158) Endangered and Threatened Wildlife and Plants; Final Rule Listing the Rio Grande Silvery Minnow as an Endangered Species, 59 Fed. Reg. 36,988, 36,988 (July 20, 1994) (to be codified at 50 C.F.R. pt. 17).

(159) See 16 U.S.C. [section] 1533(a)(3)(A)(i) (2000) ("The Secretary ... to the maximum extent prudent and determinable ... shall, concurrently with making a determination ... that a species is an endangered species ... designate any habitat of such species which is then considered to be critical habitat....").

(160) 59 Fed. Reg. at 36,988; see also 16 U.S.C. [section] 1533(b)(6)(C) (2000).

(161) 16 U.S.C. [section] 1533(b)(6)(C) (2000).

(162) Forest Guardians v. Babbitt, No. CIV 97-0453 (D.N.M. 1997), rev'd, 174 F.3d 1178 (10th Cir. 1909).

(163) Act of April 10, 1995, Pub. L. No. 104-6, 109 Stat. 86; see Endangered and Threatened Wildlife and Plants; Restarting the Listing Program and Final Listing Priority Guidance, 61 Fed. Reg. 24,722, 24,723 (May 16, 1996) (describing the spending moratoria and FWS's response).

(164) Silvery Minnow, 333 F.3d 1109, 1125 (10th Cir. 2003), vacated, 355 F.3d 1215 (10th Cir. 2004).

(165) Forest Guardians v. Babbitt, No. CIV 97-0453 (D.N.M. 1997), rev'd, 174 F.3d 1178 (10th Cir. 1999)..

(166) Id.

(167) Id.

(168) Forest Guardians v. Babbitt, 174 F.3d 1178, 1193 (10th Cir. 1999).

(169) Endangered and Threatened Wildlife and Plants; Final Designation of Critical Habitat for the Rio Grande Silvery Minnow, 64 Fed. Reg. 36,274, 36,274 (July 6, 1999) (to be codified at 50 C.F.R. pt. 17).

(170) 42 U.S.C. [section] 4332 (2000).

(171) 16 U.S.C. [section] 1536(e)(1) (2000).

(172) Middle Rio Grande Conservancy Dist. v. Babbitt, 206 F. Supp. 2d 1156, 1179 (D.N.M. 2000) (emphasis in original).

(173) Id. at 1179.

(174) Id. at 1180.

(175) Id.

(176) Id. at 1193.

(177) Middle Rio Grande Conservancy Dist. v. Norton, 294 F.3d 1220, 1223 (10th Cir. 2002); see Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for the Rio Grande Silvery Minnow, 67 Fed. Reg 39,206, 39,206 (proposed June 6, 2002) (to be codified at 50 C.F.R. pt. 17) (proposing new critical habitat designation).

(178) Norton, 294 F.3d at 1223.

(179) Id. at 1226-27.

(180) Id. at 1227.

(181) Id.. at 1228.

(182) 16 U.S.C. [section] 1536(a)(2) (2000).

(183) Norton, 294 F.3d at 1228-29.

(184) See Rio Grande Silvery Minnow v. Keys, No. CV 99-01320 JP/RLP-ACE, Mere. Op. and Order (D.N.M. Apr. 19, 2002) [hereinafter Order I] (on file with author) (finding the June 29, 2001 BiOp to be sound); Rio Grande Silvery Minnow v. Keys, No. CV 99-01329 JP/RLP-ACE, Order and Partial Final Judgment (D.N.M. Sept. 23, 2002) [hereinafter Order H] (on file with author).

(185) Press Release, Laird Lucas, Land and Water Fund of the Rockies, 60 Day Notice of Intent to Sue Over Middle Rio Grande River Water Management (Jan. 29, 1999),

(186) Order I, supra note 184, at 2, 9, 16.

(187) Id. at 17.

(188) Id. at 38.

(189) Id.

(190) 50 C.F.R. [section] 402.02 (2003).

(191) Order I, supra note 184, at 30-33. The cases, all denied certiorari by the Supreme Court, are O'Neill v. United States, 50 F.3d 677 (9th Cir. 1995), cert. denied, 516 U.S. 1028 (1995); Klamath Water Users Protective Ass'n v. Patterson, 204 F.3d 1206 (9th Cir. 1999), cert. denied, 531 U.S. 812 (2000); and Natural Resources Defense Council v. Houston, 146 F.3d 1118 (9th Cir. 1998), cert. denied, 526 U.S. 1111 (1999).

(192) Order I, supra note 184, at 49.

(193) Rio Grande Silvery Minnow v. Keys, No. CV 99-01320 JP/RLP-ACE, Mem. Op. and Findings of Fact and Conclusions of Law (D.N.M. 2003) (on file with author).

(194) Id.

(195) The District Court stated,
   This Court reasonably understood and expected that, when faced with
   severe drought, [the Bureau] would quickly request reinitiation of
   consultation which would result in a proposed action and an RPA
   that would avoid jeopardy to the silvery minnow, most likely by
   [the Bureau] using its full discretion to provide more, not less,
   water releases for the benefit of the silvery minnow.... However,
   this Court did not expect that, having made all contract deliveries
   in 2002, [the Bureau] would simply refuse to consider releasing any
   more water from Heron Reservoir to benefit the silvery minnow.

Id. at 4-5.

(196) Id. at 26.

(197) Id. at 25-26.

(198) Id. at 26.

(199) Order II, supra note 184, at 2-3..

(200) Id. at 3.

(201) Silvery Minnow, 333 F.3d 1109, 1134 (10th Cir. 2003), vacated, 355 F.3d 1215 (10th Cir. 2004).

(202) Id. at 1129-30.

(203) Id. at 1130-31.

(204) Id. at 1127 (citing 50 C.F.R. [section] 402.03 (2003)).

(205) See discussion supra Part II.C.

(206) City Contract, supra note 81, art. 18b.

(207) Id.

(208) Id. pmbl.; District Contract, supra note 81, pmbl.

(209) Silvery Minnow, 333 F.3d at 1130.

(210) Id. at 1128.

(211) Id.

(212) Id. at 1128-1129.

(213) Id.

(214) See O'Neill, 50 F.3d 677, 683 (9th Cir. 1995) (summarizing the Bureau's argument before the Ninth Circuit that, in order to comply with ESA and the Central Valley Project Improvement Act (CVPIA), Pub. L. No. 102-575, [subsection] 3401-3412, 106 Stat. 4600, 4706-31 (1992), it had the discretion to curtail water deliveries to protect endangered fish).

(215) Silvery Minnow, 333 F.3d at 1130 (citing O'Neill, 50 F.3d at 686).

(216) Id. at 1129-30 (internal citation omitted).

(217) Id.

(218) Id. (quoting Klamath Water Users, 204 F.3d 1206, 1213 (9th Cir. 1999)). The court elaborated,
   [T]hree general precepts emerge which underpin our conclusion here.
   First, under the principles of contract interpretation, the plain
   terms govern. Second, the contracts, written under the reclamation
   laws, and all acts amendatory and supplementary thereto envision
   applying subsequent legislation in their interpretation. Finally,
   the plain terms of the shortage clauses provide the basis for BOR's
   retaining discretion to allocate available water to comply with the

Id. (internal quotations omitted) (emphasis added). (219) Id. at 1131.

(220) Id. at 1132.

(221) Id. at 1131-32.

(222) Id. at 1132.

(223) Id.

(224) Id. at 1133-34.

(225) Id. at 1134.

(226) Id. at 1136.

(227) 16 U.S.C. [section] 662(a) (2000). The Act provides,
   [W]henever the waters of any stream or other body of water are
   proposed or authorized to be impounded, diverted, the channel
   deepened, or the stream or other body of water otherwise controlled
   or modified for any purpose whatever ... by any department or
   agency or the United States ... such department or agency first
   shall consult with the United States Fish and Wildlife Service ...
   with a view to the conservation of wildlife resources by preventing
   loss of and damage to such resources as well as providing for the
   development and improvement thereof in connection with such
   water-resource development.


(228) Silvery Minnow, 333 F.3d at 1137.

(229) Id. at 1140 (Seymour, J., concurring). Judge Seymour, citing United States v. Winstar Corp., 518 U.S. 839, 877-78 (2000), stated, "[A]bsent an 'unmistakable' provision to the contrary, contractual arrangements, including those to which a sovereign itself is a party, remain subject to subsequent legislation by the sovereign." Silvery Minnow, 333 F.3d at 1139 (Seymour, J., concurring). Judge Seymour found that, in contrast to Winstar (in which plaintiff savings and loan associations sought damages from the government for breach of an agreed temporary statutory exemption), water users seeking to prevent the Bureau from reallocating water for species protection would have limited the government's sovereign authority to enforce the ESA. Id. at 1141 (Seymour, J., concurring).

(230) Silvery Minnow, 333 F.3d at 1140 (Seymour, J., concurring) (quoting Winstar, 518 U.S. at 879).

(231) Id. at 1142 (Kelly, J., dissenting).

(232) Id. at 1144 (Kelly, J., dissenting).

(233) 50 C.F.R. [section] 402.03 (2003).

(234) Silvery Minnow, 333 F.3d at 1145 (Kelly, J., dissenting) (citing Sierra Club v. Babbitt, 65 F.3d 1502 (9th Cir. 1995) (holding that Congress did not intend section 7 to apply retrospectively to agreements entered into prior to the ESA's passage)). The dissent also cited Platte River Whooping Crane Critical Habitat Trust v. Federal Energy Regulatory Commission, 962 F.2d 27 (D.C. Cir. 1992), for the principle that the ESA's broad mandate must still be circumscribed by agencies' existing statutory authority. Silvery Minnow, 333 F.3d at 1145.

(235) Judge Kelly noted,
   [The shortage clauses'] purpose is to hold the United States
   harmless from liability for damages arising by reason of shortages
   in irrigation water resulting from distribution or any other
   causes. They are defensive in nature, and to interpret them as
   affirmative grants of discretion to ... reduce contract deliveries
   in the absence of a shortage does violence to their language and

Silvery Minnow, 333 F.3d at 1151 (Kelly, J., dissenting) (internal citations omitted).

(236) Id. at 1152 (Kelly, J., dissenting).

(237) Id. at 1151 (Kelly, J., dissenting).

(238) The dissent takes the majority to task for resolving the case on an alternative holding that the umnistakable terms doctrine applies when the doctrine was never argued before the court. The majority merely contemplates the doctrine's possible application in a footnote. Id. at 1128-29 n.25. However, Judge Seymour's discussion of the doctrine ill concurrence, while illuminating, is in concurrence and does not serve as a foundation for the court's narrow holding about agency discretion. Therefore, Judge Kelly's lengthy address to the majority regarding the error of resolving a case on a non-jurisdictional issue not briefed on appeal seems misplaced. In sum, the dissent would have applied the doctrine only if the ESA served as unmistakable grant of discretion, and not a reservation. While the tension between the judges is interesting, the unmistakable terms doctrine was not central to the disposition of the case.

(239) Id. at 1157 (Kelly, J., dissenting).

(240) Id.

(241) The dissent cited California v. United States, 438 U.S. 645 (1978), for the proposition that the federal government must abide by state water law in operating Reclamation projects. See Silvery Minnow, 333 F.3d at 1157-58 (Kelly, J., dissenting). The dissent's citation suggests a far broader interpretation of the federalism inherent in reclamation law than Justice Rehnquist's holding would allow.

(242) Silvery Minnow, 333 F.3d at 1138.

(243) Id. at 1119.

(244) Judith Graham, Water Fight Pits Man Against Fish, CHI. TRIB., Aug. 1, 2003, available at

(245) See Doremus, supra note 88, at 380 (noting that all uses have a federal nexus under section 7). Doremus posits that, as municipal uses come into increasing conflict with the ESA, they will come into conflict with agricultural uses generally favored under reclamation law. With the significant resources and influence of municipalities brought to bear against western agricultural water users, the result, though acrimonious, may be a more sensible, efficient allocation of reclamation water that serves the needs of the West's urban majority and that majority's general interest in species protection. Id. at 411-12.

(246) See Benson, supra note 25, at 364 (describing the social policies fostered by the reclamation program).

(247) TARLOCK ET AL., supra note 42, at 760.

(248) WATER UTIL. DEP'T, CITY OF ALBEQUERQUE, OVERVIEW TIMELINE, at (last visited Nov. 26, 2004).

(249) Silvery Minnow, 333 F.3d 1109, 1156 (10th Cir. 2003), vacated, 355 F.3d 1215 (10th Cir. 2004).

(250) 30 F.3d 1050 (9th Cir. 1994).

(251) Id. at 1053. The Pacific Rivers court elaborated,
   LRMPs are comprehensive management plans governing a multitude of
   individual projects. Indeed, every individual project planned in
   both national forests involved in this case is implemented
   according to the LRMPs. Thus, because the LRMPs have an ongoing
   and long-lasting effect even after adoption, we hold that the

   LRMPs represent ongoing agency action.

Id. (emphasis added).

(252) Id. at 1055.

(253) FED. R. CIV. P. 12(b)(6).

(254) Pacific Rivers, 30 F.3d at 1053.

(255) 65 F.3d 1502, 1511-12 (9th Cir. 1995).

(256) Id. at 1509.

(257) Id. at 1511.

(258) Id. at 1509.

(259) Id. at 1509 n.10. See also Marbled Murrelet v. Babbitt, 83 F.3d 1068, 1074 (9th Cir. 1996) (reaffirming the conclusions of footnotes 10 and 15 of Sierra Club that the agency's power to invoke enforcement of section 9's take prohibition cannot be the basis for a finding of discretionary involvement or control triggering the consultation requirement).

ESA section 9 bars "taking" listed species. 16 U.S.C. [section] 1538(a)(1) (2000). "Take" is defined as "harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect" a listed species. Id. [section] 1532(19). The Ninth Circuit has held adverse habitat modification that does not necessarily physically injure or kill a listed species to be "harm" within the definition of "take." Palila v. Hawaii Dep't of Land & Natural Res. (Palila I), 639 F.2d 495, 498 (9th Cir. 1981); accord Palila v. Hawaii Dep't of Land & Natural Res. (Palila II), 852 F.2d 1106, 1110 (9th Cir. 1988). However, Palila I and II's holdings that "harm" does not necessitate death or injury to individuals have been cast into some doubt by language in Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687, 709 (1995) (O'Connor, J., concurring).

(260) Sierra Club, 65 F.3d 1502, 1510 (9th Cir. 1993).

(261) Id. at 1509.

(262) It is unclear under what test the Ninth Circuit decided Klamath Water Users. While the opinion cites O'Neill, it is unclear whether O'Neill may be considered its own test for discretionary involvement or control, or, rather, is subsumed in the Pacific Rivers test.

(263) 255 F.3d 1073 (9th Cir. 2001).

(264) 16 U.S.C. [section] 1539(a)(1)(B) (2000). Section 10 requires a private landowner to secure an "Incidental Take Permit" from the FWS before conducting activities that may take listed species under section 9. The applicant must submit to FWS for approval a Habitat Conservation Plan (HCP) that explains "(i) the impact which will likely result from the taking; (ii) what steps the applicant will take to minimize and mitigate such impacts; ... and (iv) such other measures that the Secretary may require as being necessary or appropriate for purposes of the plan." Id. [section] 1539(a)(2)(A).

(265) EPIC, 255 F.3d at 1080 ("Simpson's ESA section 10 permit, like the right-of-way agreement in Sierra Club, involves agency authorization of a private action and a more limited role for the FWS.").

(266) Id. at 1081. The court did seem to make oblique reference to the unmistakable terms doctrine:
   [W]e do not hold that the incidental take permit must explicitly
   grant the FWS the power to protect marbled murrelet and Coho salmon
   in order for reconsultation to be triggered. Instead, we hold that
   the permit must reserve to the FWS discretion to act to protect
   species in addition to the northern spotted owl. The permit does not
   reserve such discretion to FWS.

Id. at 1081 n.6.

(267) The court stated,
   EPIC contends, relying on [NRDC v. Houston], that so long as a
   permitting agency maintains "some" discretionary control, it has a
   duty to reconsult under section 7(a)(2). EPIC argues Houston
   demonstrates that "existing contracts and permits that are in no way
   related to the ESA or do not provide mechanisms to protect [listed]
   species may require alteration if necessary to comply with the ESA."
   We do not read Houston as supporting EPIC's argument ... We did not
   suggest in Houston that once the renewed contracts were executed,
   the agency had continuing discretion to amend them at any time to
   address the needs of endangered or threatened species. Houston is

Id. at 1082. See also Scott Timber Co. v. United States, 333 F.3d 1358, 1366-67 (Fed. Cir. 2003) (holding that a clause in timber sales contracts permitting contract term adjustments for delays caused by "acts of Government" "beyond Purchaser's control" did not grant the Forest Service authority to suspend the contracts due to the threatened species listing of the marbled murrelet; the listing of the murrelet was not an intervening act that itself directly prevented contractor from performing under the contracts; rather, "[t]he only 'act of Government' 'beyond the Purchaser's control' that caused [contractor] to 'experience[] delay' was the Forest Service's order to suspend"), reh'g denied, 2003 U.S. App. LEXIS 22502 (Fed. Cir. 2003).

(268) Jicarilla, 657 F.2d 1126, 1139 (10th Cir. 1981).

(269) Steven J. Shupe & Lawrence J. MacDonnell, Recognizing the Value of In-Place Uses of Water in the West: An Introduction to the Laws, Strategies, and Issues, in INSTREAM FLOW PROTECTION IN THE WEST 1-1, 1-4 (Lawrence J. MacDonnell & Teresa A. Rice eds., 1993).

(270) Act of Dee. 29, 1981, Pub. L. No. 97-140, See. 5(a), 95 Stat. 1717 (1981). See discussion supra Part II.C.2.

(271) 438 U.S. 645, 667 (1978).

(272) See Beth Richards, Note, The Pump Don't Work Because the Bureau Took the Handle: The United States Bureau of Reclamation's Discretion to Reduce Water Deliveries to Comply with the Endangered Species Act, 4 WYO. L. REV. 113, 129 (2004) (emphasizing the legal distinction between natural flow subject to state law and control and project water for which the Bureau may not own a right but nonetheless exercises the federal government's right to regulate that which it subsidizes); see also Ivanhoe Irrigation Dist. v. McCracken, 357 U.S. 275, 295 (1958) ("[B]eyond challenge is the power of the Federal Government to impose reasonable conditions on the use of federal funds, federal property, and federal privileges."); Benson, supra note 25, at 390 (stating that "project water rights are subject to an unusual degree of federal control").

(273) See Israel v. Morton, 549 F.2d 128, 132 (9th Cir. 1977) (recognizing the distinction between "nonproject" water and project water, which "would not exist but for the fact that it has been developed by the United States"). The Israel court continued, "[Project water[ is not there for the taking by the landowner subject to state law, but for the giving by the United States." Id. (parenthetical omitted).

(274) Order II, supra note 184, at 21.

(275) 43 U.S.C. [section] 372 (2000).

(276) N.M. STAT. ANN. [section] 72-1-2 (Michie 1978).

(277) State v. McLean, 308 P.2d 983, 987-89 (N.M. 1957) ("An excessive diversion of water, through waste, cannot be regarded as a diversion to beneficial use....")

(278) Order I, supra note 184, at 30.

(279) See Brown, supra note 120, at 17 (noting that a finding of nonbeneficial use by the District could potentially be used by the State, should it choose to enforce the law, to free up some of the District's waters properly reserved for the welfare of the public).

(280) Ben Neary, River Dries Up South of Socorro: Workers Save Silvery Minnow While Other Fish Species Perish, SANTA rE NEW MEXICAN, July 4, 2003,

(281) Order I, supra note 184, at 32-33.

(282) Graham, supra note 244.

(283) Ed Asher, Mayor Pursues Judicial Options on Fish, ALBUQUERQUE TRIB., June 19, 2003,

(284) Indeed, some major western cities have been gearing up for the potential shift in the West's power base in water resource allocation. For example, to represent the interests of urban water users, Denver, Las Vegas, Reno, Portland, Salt Lake City, and Seattle formed the Western Urban Water Coalition (WUWC) in 1992. Such an alliance is an attempt to "shatter[] the historic coalition between urban and agricultural users that was powerful in moving Congress to appropriate funds for major water projects." TARLOCK, ET AL., supra note 42, at 760. Such coalitions further the shift the West's preeminent resource interests, perhaps converting McCool's paradigm of the historic 'Iron Triangle' of irrigation-focused state water agencies, the Bureau, and powerful western congressmen into a square.

(285) Energy and Water Development Act of 2004, Pub. L. No. 108-137, 117 Stat. 1827 (2003).

(286) Id. at 1849. The $27.8 billion appropriation was approved by both houses of Congress and signed into law on December 1, 2003. The Domenici-Bingaman rider appears at section 208(a)-(b), the text reading as follows:
   SEC. 208. (a) Notwithstanding any other provision of law, the
   Secretary of the Interior, acting through the Commissioner of the
   Bureau of Reclamation, may not obligate funds appropriated for
   the current fiscal year or any prior Energy and Water Development
   Appropriations Act, or funds otherwise made available to the
   Commissioner of the Bureau of Reclamation, and may not use
   discretion, if any, to restrict, reduce or reallocate any water
   stored in Heron Reservoir or delivered pursuant to San Juan-Chama
   Project contracts, including execution of said contacts
   facilitated by the Middle Rio Grande Project, to meet the
   requirements of the Endangered Species Act, unless such water is
   acquired or otherwise made available from a willing seller or
   lessor and the use is in compliance with the laws of the State of
   New Mexico, including but not limited to, permitting requirements.

Id. at 1849 (emphasis added).

(287) Jason M. Patlis, Riders on the Storm, or Navigating the Crosswinds of Appropriations and Administration of the Endangered Species Act: A Play in Five Acts, 16 TUL. ENVTL. L.J. 257, 265 (2003).

(288) Emergency Supplemental Appropriations for Disaster Relief and Rescissions Act, Pub. L. No. 104-19, [section] 2001, 109 Stat. 240, 240-47 (1995). (Un)popularly known as the "Salvage Rider," the language exempting certain salvage operations was extremely broad, attached to an emergency relief package for victims of the Oklahoma City federal building bombing. See generally Axline, supra note 6 (explaining how appropriation riders affect the implementation of federal environmental laws).

(289) Balanced Budget Reconciliation Act, H.R. 2491, 105th Cong. (1995). The original version of the bill was ultimately vetoed by President Clinton, mainly due to the Arctic National Wildlife Refuge language. See Patlis, supra note 287, at 284.

(290) See Emergency Supplemental Appropriations and Rescissions for the Department of Defense to Preserve and Enhance Military Readiness Act of 1995, Pub. L. No. 104-6, tit. II, ch. 4. 109 Stat. 73, 86 (1995) (rescinding funds from the amounts available to the Departments of the Interior and Defense for determinations made pursuant to Endangered Species Act of 1973).

(291) Patlis, supra note 287, at 269-70.

(292) AG Asks 10th Circuit to Reconsider Minnow Ruling, SANTA FE NEW MEXICAN, Aug. 12, 2003,

(293) Frank Zoretich, Governor Backs Appeal Strategy on the Minnow, ALBUQUERQUE TRIB., June 17, 2003, 061703_news_homminno.shtml. See also Reed D. Benson, The Interior Department's 'Water 2025': Blueprint for Balance, or Just Better Business as Usual?, 33 Envtl. L. Rep. (Envtl. L. Inst.) 10,837 (2003) (dissecting the Department of the Interior's recently published and much-touted (by the Department, at least) policy agenda, "Water 2025"). Professor Benson suggests Water 2025 suffers from a lack of specificity, but he does declare Interior's commitment to let state water law, water rights, compacts, and long-standing decrees set the pace in creating change in western resource allocation. Id. at 10,843. Interior addresses ESA considerations by emphasizing a collaboration-based approach resting on continuing deference to traditional interests. For the complete "Water 2025" document, see In light of this broad policy declaration, it seems likely that Interior will accede to appellant's request that the Department limit its involvement in defending any appeals, instead letting the issues play out in the context of state water law.

(294) Governor Asked to Request 'God Squad' in Minnow Case, SANTA FE NEW MEXICAN, June 18, 2003, Week-of-Mon-20030616/002228.html. The Endangered Species Committee, commonly referred to as the "God Squad," is a limited mechanism federal agencies may employ to exempt an action from ESA application. 16 U.S.C. [section] 1536(e) (2000). The God Squad includes the Secretaries of Agriculture, the Army, and the Interior, the Administrators of the Environmental Protection Agency and National Oceanographic and Atmospheric Administration, and the Chair of the Council on Economic Advisors. Id. [section] 1536(e)(3). Only federal agencies, state governors, or permit or license applicants may petition the Committee for exemption, and its invocation is rare. 50 C.F.R. [section] 451.02(c) (2002). To warrant exemption of a species, the Committee must find that 1) no "reasonable and prudent alternatives" to the proposed action exist, 2) the benefits of actions taken to preserve a species are clearly outweighed by the benefits of the proposed action's implementation, and 3) the proposed action is of "regional or national significance." 16 U.S.C. [section] 1536(h)(1)(A)(i)-(iii) (2000).

(295) Tania Sonssan, 'God Squad' May Get Minnow Case, ALBUQUERQUE J., June 17, 2003,

(296) Ed Asher, God Squad Not Best FIx, Chavez Says, ALBUQUERQUE TRIB., June 18, 2003,; Michael Coleman, N.M. Won't Sic 'God Squad" on Minnow--Yet, ALBUQUERQUE J., June 18, 2003,

(297) Rio Grande Silvery Minnow v. Keys (Silvery Minnow II), 355 F.3d 1215, 1218 (10th Cir. 2004).

(298) Id. at 1219.

(299) Id. See also Order II, supra note 184, at 3 ("If necessary to meet flow requirements in 2003, either under the June 29, 2001 Biological Opinion or under a new Biological Opinion resulting from reinitiation of consultation, the Bureau of Reclamation must reduce contract deliveries under the San Juan-Chama Project and/or the Middle Rio Grande Project, consistent with the Bureau of Reclamation's legal authority.").

(300) Silyery Minnow II, 355 F.3d at 1220; see Church of Scientology v. United States, 506 U.S. 9, 12 (1992) (holding that if an appellate court can fashion no meaningful relief to appellants, appeal becomes moot).

(301) Silvery Minnow II, 355 F.3d at 1221; see U.S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U.S. 18, 26 (1994) (noting that whether any opinion should be vacated on the basis of mootness is an equitable question); see also Jones v. Temmer, 57 F.3d 921, 923 (10th Cir. 1995) (noting "that mootness here resulted not from any voluntary action by plaintiffs but rather from circumstances beyond plaintiffs' control and for which they were not responsible"); New Mexico ex rel. State Highway Dep't v. Goldschmidt, 629 F.2d 665, 668 (10th Cir. 1980) (observing that whether Congress "most certainly" intends to moot a present case by intervening legislation is a matter for the courts).

(302) The court explained,
   We are persuaded that because the complaint has not been dismissed
   and because the injunction was temporally limited and preliminary,
   the district court should determine whether there are unresolved
   issues that remain to be tried. Therefore, the equities lie with
   the Plaintiffs when considering whether to vacate the District
   Court's order.


      ... Because the injunction is unenforceable, it is of no
   controlling consequence to the case. If the District Court enters
   a final order with which the parties disagree, they may
   appeal once again.

Silyery Minnow II, 355 F.3d at 1222.

(303) Judge in N.M. Gets Minnow Case Back, ALBUQUERQUE J., Jan. 6, 2004,

(304) Id.

(305) See WRIGHT ET AL., FEDERAL PRACTICE AND PROCEDURE 2D [section] 3533.6 (1975) (explaining that the mooting effect of subsequent legislation may persuade an appellate court to terminate only the mooted questions in the present proceeding, and does not foreclose on new questions of law raised in ongoing litigation).

(306) See supra note 191 and accompanying text.

[c] Ethan R. Hasenstein, 2004. Symposium Editor, Environmental Law, 2004-2005; J.D. and Certificate in Environmental and Natural Resources Law expected May 2005, Lewis & Clark Law School; M.S. 2001, University of Montana; B.A. 1996, University of Oregon. The author wishes to thank Professor Janet Neuman for her encouragement and valuable guidance in preparing this Note.
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Title Annotation:Public Lands Management at the Crossroads: Balancing Interests in the 21st Century
Author:Hasenstein, Ethan R.
Publication:Environmental Law
Date:Sep 22, 2004
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