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October 25, 2000


The opinion of the court was delivered by: Illston, District Judge.


On October 13, 2000, the Court heard argument on the parties' cross-motions for summary judgment. Having carefully considered the arguments of the parties and the papers submitted, the Court GRANTS plaintiffs' motion for summary judgment and DENIES defendants' cross-motion for summary judgment for the reasons set forth below.


Plaintiffs Federation of Fly Fishers, et al. ("Fly Fishers")challenge a March 19, 1998 Final Rule by the Secretary of Commerce, acting through the National Marine Fisheries Service ("NMFS"), not to list the Klamath Mountains Province Evolutionarily Significant Unit ("ESU")of steelhead as a threatened species under the Endangered Species Act ("ESA"), 16 U.S.C. § 1531 et seq. For purposes of listing under the ESA, a "species" is defined by geographical population segments called ESUs. Administrative Record ("AR")Ex. 15 at 3. The Klamath Mountains Province ESU of steelhead occupies river basins in the Elk River in southern Oregon through the Klamath River in Northern California. AR Ex. 1 at 13352. Steelhead (Oncorhynchus mykiss)are a salmonid species that occur on the west coast in two distinct genetic groups — coastal and inland. AR Ex. 1 at 13347. Steelhead can also be classified as winter-run or summer-run depending on their sexual maturity and spawning patterns. AR Ex. 1 at 13348, 13352. The Klamath Mountains Province ESU steelhead are coastal and include both winter-run and summer-run steelhead. AR Ex. 1 at 133352.

In May 1992, several of the plaintiffs in this case submitted a petition to NMFS requesting that the winter-run steelhead occupying the Illinois River in southern Oregon be listed under the ESA. Plaintiffs' Motion 7. NMFS determined that the request "may be warranted" and directed its Biological Review Team ("BRT")to conduct a status review. AR Ex. 449 at 33939. The BRT determined that the Illinois River steelhead are part of a larger ESU, known as the Klamath Mountains Province ESU. Defendants' Opposition 5. The BRT analyzed scientific data and historical and present conditions affecting the larger Klamath Mountains Province ESU. Plaintiffs' Motion at 7. The status review culminated in a report issued to NMFS in December 1994 ("1994 Status Report"). Id. The BRT stated that it was "unable to identify any steelhead populations that are naturally self-sustaining" within the Klamath Mountains Province ESU, and thus concluded, "steelhead within this ESU are likely to become endangered in the foreseeable future" if present conditions continue. Id.; Defendants' Motion 5.

In February 1994, a second petition was submitted to NMFS requesting listing of all west coast steelhead populations. Plaintiffs' Motion 7. NMFS again determined that the request to list "may be warranted." AR Ex. 230. NMFS stated that the petition would be incorporated into the on-going review of west coast steelhead populations it was already conducting.*fn1 Plaintiffs' Motion 7. The on-going review produced a comprehensive report issued in August 1996 assessing the biological status of steelhead populations in Washington, Idaho, Oregon, and California ("1996 Status Report"). AR Ex. 15.

The 1996 Status Report identified five ESUs of steelhead that were presently in danger of extinction and five ESUs that were likely to become endangered in the foreseeable future. AR Ex. 15 at vii. The Klamath Mountains Province ESU was identified among the ESUs likely to become endangered. Id. The BRT's determination was based on scientific conclusions and did not consider whether any then existing federal or state conservation efforts could ameliorate the decline in steelhead population. AR Ex. 15 at 4. Hence, the BRT did not give a recommendation as to whether the Klamath Mountains Province ESU should be listed as threatened.

On August 9, 1996, based on the 1996 Status Report, NMFS proposed to list the Klamath Mountains Province ESU as threatened, in addition to the nine other ESUs identified in the status report as endangered or threatened. NMFS based its Proposed Rule on the recognition that numerous efforts to halt the decline of the steelhead population were inadequate. AR Ex. 13 at 41556. On August 18, 1997, NMFS issued the Final Rule to list five of the ESUs in the proposed listing. AR Ex. 8 at 43974. The Klamath Mountains Province ESU was not among those listed. Id. Instead, final determination on the Klamath Mountains Province ESU along with the other ESUs not listed was postponed. NMFS invoked a six-month extension period because it found that a scientific disagreement existed regarding the proposed listing of these ESUs. AR Ex. 8 at 43974. The extension period allowed NMFS to collect and review new information received from California and Oregon since the 1996 status review. Plaintiff's Motion 8. NMFS additionally held public hearings and considered comments from a number of peer reviewers. Id.

The extended status review produced a third report concerning the Klamath Mountains Province ESU in December 1997 ("1997 Status Report"). AR Ex. 6. As with the first two status reports, the BRT gave scientific conclusions that the Klamath Mountains Province ESU is "likely to become endangered in the foreseeable future" if present trends continue. AR Ex. 6 at iv, 29. Having considered the BRT's status review, NMFS on March 19, 1998 issued the Final Rule. AR Ex. 1. NMFS declined to list the Klamath Mountains Province ESU as a threatened species and withdrew its 1996 Proposed Rule with respect to this ESU. AR Ex. 1 at 13347. NMFS reasoned that the Klamath Mountains Province ESU was not threatened in light of available conservation measures that were adequate to ameliorate the declining trend. Defendants' Opposition 8. NMFS did, however, list two of the five candidate ESUs — Lower Columbia River and California Central Valley. Id.

Plaintiffs brought this action under the Administrative Procedure Act, 5 U.S.C. § 706(2), challenging NMFS's Final Rule of 1998 as arbitrary and capricious.*fn2 Before the Court is plaintiffs' motion for summary judgment and defendants' cross-motion for summary judgment.


A. Summary Judgment

The Federal Rules of Civil Procedure provide for summary adjudication when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

In a motion for summary judgment, "[if] the moving party for summary judgment meets its initial burden of identifying for the court those portions of the materials on file that it believes demonstrate the absence of any genuine issues of material fact, the burden of production then shifts so that the non-moving party must set forth, by affidavit or as otherwise provided in Rule 56, `specific facts showing that there is a genuine issue for trial.'" See T.W. Elec. Service, Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d 626, 630 (9th Cir. 1987) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

In judging evidence at the summary judgment stage, the Court does not make credibility determinations or weigh conflicting evidence, and draws all inferences in the light most favorable to the nonmoving party. See T.W. Electric, 809 F.2d at 630-31 (citing Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)); Ting v. United States, 927 F.2d 1504, 1509 (9th Cir. 1991). The evidence presented by the parties must be admissible. Fed. R.Civ.P. 56(e). Conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment. See Falls Riverway Realty, Inc. v. City of Niagara Falls, 754 F.2d 49 (2d Cir. 1985); Thornhill Publ'g Co., Inc. v. GT & E Corp., 594 F.2d 730, 738 (9th Cir. 1979). Hearsay statements found in affidavits are inadmissible. See, e.g., Fong v. American Airlines, Inc., 626 F.2d 759, 762-63 (9th Cir. 1980).

B. Review of Administrative Action

1. The Administrative Procedure Act Applies

This Court's review of NMFS's decision not to list the Klamath Mountains Province ESU is governed by the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2). Pyramid Lake Paiute Tribe v. U.S. Dep't of the Navy, 898 F.2d 1410, 1413 (9th Cir. 1990). The Court "shall" set aside any agency decision that the Court finds is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). The APA restricts the trial court reviewing an agency action from considering any evidence outside of the administrative record available to the agency at the time of the challenged decision. See 5 U.S.C. § 706(2)(E); Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743-44, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985); Havasupai Tribe v. Robertson, 943 F.2d 32, 34 (9th Cir. 1991), cert. denied, 503 U.S. 959, 112 S.Ct. 1559, 118 L.Ed.2d 207 (1992).

The Court must determine whether the agency decision "was based on a consideration of the relevant factors and whether there has been a clear error of judgment." Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). The Supreme Court has explained that an agency action would be arbitrary and capricious if "the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, [or] offered an explanation for its decision that runs counter to the evidence before the agency. . . ." Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). Although the arbitrary and capricious standard "is narrow and presumes the agency action is valid, . . . it does not shield agency action from a `thorough, probing, indepth review.'" Northern Spotted Owl v. Hodel, 716 F. Supp. 479, 481-82 (W.D.Wash. 1988) (citations omitted). The Court cannot, however, substitute its judgment for that of the agency and should not determine whether it would have decided an issue differently. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 377, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989).

2. Applicability of Motor Vehicles Mfrs. Ass'n v. State Farm Insurance Co.

The parties dispute to what extent Motor Vehicle Mfrs. Ass'n is applicable to the present action. The Supreme Court in that case found arbitrary and capricious a decision by the National Highway Traffic Safety Administration to rescind an existing regulation requiring air bags and passive seat restraints in passenger automobiles. The Supreme Court held, "an agency changing its course by rescinding a rule is obligated to supply a reasoned analysis for the change beyond that which may be required when an agency does not act in the first instance." Motor Vehicle Mfrs. Ass'n, 463 U.S. at 41-42, 103 S.Ct. 2856. Plaintiffs argue that this language should be read to mean that an "agency's change of position can be taken as evidence of arbitrariness unless adequately explained, and that the agency has the burden of explaining the change." Plaintiffs' Reply and Opposition to Defendants' Cross-Motion 8.

Defendants, on the other hand, argue that Motor Vehicle Mfrs. Ass'n is not applicable because "[t]here was no previous rule in our case, merely a proposal." Defendants' Opposition 12. Defendants further argue that a change in position from a proposed rule is not the same as the rescission of an issued rule because "[a] paramount purpose of the APA is to make an agency publish its preliminary rule and then to rethink that position, in light of the comments and additional information received." Id. (emphasis in original).

In support of their position, plaintiffs cite General Elec. Co. v. United States Dep't of Commerce, 128 F.3d 767, 775 (D.C.Cir. 1997), and Oregon Natural Resources Council v. Daley, 6 F. Supp.2d 1139, 1152 (D.Or. 1998). General Electric involved a challenge to a final rule issued by the National Oceanic and Atmospheric Association ("NOAA") pursuant to the Oil Pollution Act of 1990, passed in response to the Exxon Valdez oil spill. 128 F.3d at 769. Applying the APA's arbitrary and capricious standard, the Court vacated one provision of the final rule for "lack of reasoned decision-making" because the NOAA failed to explain a change in position from the proposed rule to the final rule. The final rule gave trustees the power to "remove conditions that would prevent or limit the effectiveness of any restoration action (e.g., residual sources of contamination)." Id. at 774. The proposed rule had only directed the trustee to "consider" whether conditions exist that would impede the primary restoration action of an oil spill. Id. at 775. The NOAA's lack of explanation for the change in position was fatal to the final rule because it created ambiguity over "the interrelationship between trustees' residual removal authority and the primary removal authority of the EPA and the Coast Guard," whereas the proposed rule did not. Id.

General Electric is distinguishable from this case because the change in position there involved an affirmative grant of authority that altered existing relationships between agencies who shared duties in a restoration action. It was thus critical that the agency explain how the new division of power operates. The present case does not involve an alteration of agency functions. The Court thus finds General Electric inapplicable to the present case.

Oregon Natural Resources Council v. Daley involved facts identical to the present matter. NMFS in that case issued a final rule not listing the Oregon Coast ESU of coho salmon as a threatened species after its proposed rule indicated that the ESU should be listed. 6 F. Supp.2d at 1152. The district court held, "Although it is certainly permissible for the NMFS to change its position after considering public comments and soliciting additional data, the issue is why it changed its position. . . ." Id. Nothing in this statement indicates that NMFS has the burden or obligation to explain why it changed its position. ...

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