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November 10, 2005.


The opinion of the court was delivered by: CHARLES BREYER, District Judge


This lawsuit challenges the logging of forests on private land in Humboldt County, California. Now pending before the Court are two motions.

First, defendants U.S. Fish & Wildlife Service ("the Service") and NOAA Fisheries, (collectively "Federal Defendants") move for dismissal/summary judgment of the second claim for relief alleging that Federal Defendants must supplement the environmental impact statement ("EIS") pursuant to the National Environmental Policy Act ("NEPA"); and the seventh claim for relief seeking an order pursuant to the Endangered Species Act ("ESA") requiring Federal Defendants to revoke the incidental take permit issued to defendant Pacific Lumber Company ("PALCO") on the ground that PALCO has violated the Habitat Conservation Plan ("Conservation Plan") adopted in connection with the permit. Second, plaintiffs move for a preliminary injunction of PALCO's logging activities authorized under the Conservation Plan/Take Permit based on the likely merits of the NEPA claim and the fifteenth claim for relief. The latter claim alleges that the Service's recent conclusion that PALCO's logging activity poses "no jeopardy" to marbled murrelets was arbitrary and capricious.


  Signed in 1999, the Headwaters Accord represented the efforts of timber companies, state and federal governments, and environmental interest groups to provide a compromise between the timber industry's interest in harvesting timber stands, including old-growth redwood, on their lands and environmentalists' interest in protecting endangered species, such as the marbled murrelet. The Agreement provided for the sale of certain lands to the government and set aside other lands for murrelet protection, as well as created a comprehensive plan for murrelet habitat conservation.

  A. The Legal Landscape: ESA and NEPA

  Under the ESA it is illegal for any person to "take" threatened or endangered species. See 16 U.S.C. § 1538(a)(1)(B). Section 10 of the ESA creates an exception to the rule against takes. "It grants [the Service] the power to issue permits allowing for the take of listed species that incidentally results from lawful activities on private property." Southwest Center for Biological Diversity v. Berg, 268 F.3d 810, 814 (9th Cir. 2001) (citing 16 U.S.C. § 1539(a)(1)(B)). To obtain a take permit, a party must develop a habitat conservation plan "that provides for ongoing mitigation efforts to minimize the project's future impact on protected species." Id. (citing 16 U.S.C. § 1539(a)(2); 50 C.F.R. § 17.22).

  The issuance, or rather, consideration of whether to issue, a take permit also requires the Service to initiate consultation pursuant to section 7 of the ESA. Whenever an agency action may affect an ESA-listed species, "the agency planning the action, usually known as the `action agency,' must consult with the consulting agency. This process is known as a `Section 7' consultation. . . . After consultation and analysis, the consulting agency then prepares a biological opinion." National Wildlife Federation v. National Marine Fisheries Service, 422 F.3d 782, 790 (9th Cir. 2005).

The consulting agency evaluates the effects of the proposed action on the survival of species and any potential destruction or adverse modification of critical habitat in a biological opinion, 16 U.S.C. § 1536(b), based on the "best scientific and commercial data available," id. at § 1536(a)(2). The biological opinion includes a summary of the information upon which the opinion is based, a discussion of the effects of the action on listed species or critical habitat, and the consulting agency's opinion on "whether the action is likely to jeopardize the continued existence of a listed species or result in the destruction or adverse modification of critical habitat. . . ." 50 C.F.R. § 402.14(h).
Id. "If the biological opinion concludes that jeopardy is not likely and that there will not be adverse modification of critical habitat, or that there is a `reasonable and prudent alternative' to the agency action that avoids jeopardy and adverse modification and that the incidental taking of endangered or threatened species will not violate section 7(a)(2), the consulting agency can issue an "Incidental Take Statement" which, if followed, exempts the agency action from the prohibition on takings found in Section 9 of the ESA." Id. (citation and footnote omitted). If, on the other hand, the agency determines that "an agency's action may jeopardize the survival of species protected by the ESA, or adversely modify a species' critical habitat, the action must be modified." Id.

  The issuance of a take permit may also require a federal agency to prepare an EIS pursuant to NEPA. See 42 U.S.C. § 4332(2)(C) (mandating that federal agencies prepare an EIS for "major federal actions" "significantly affecting the quality of the human environment"); see also Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55, 124 S. Ct. 2373, 2384 (2004) ("NEPA requires a federal agency to prepare an environmental impact statement (EIS) as part of any `proposals for legislation and other major Federal actions significantly affecting the quality of the human environment.'") (citation omitted); Ramsey v. Kantor, 96 F.3d 434, 444 (9th Cir. 1996) (holding that if a federal takings permit is a prerequisite for a project with an adverse impact on the environment, the relevant federal agency may be required to prepare an EIS). B. The 1999 Biological Opinion

  As part of the Headwaters Accord, the Service issued an incidental take permit to PALCO that allowed for the "take" of marbled murrelets under the conditions set forth in the Conservation Plan and Implementation Agreement (the "Take Permit"). These documents — the Conservation Plan, Take Permit, and Implementation Agreement — collectively outline the responsibilities of PALCO and Federal Defendants in executing the Accord.

  Because the Service's issuance of the PALCO Take Permit would affect the marbled murrelet, the Service completed its own consultation process in 1999 that resulted in a biological opinion concluding that, under the conditions set forth in the Conservation Plan and Implementation Agreement, PALCO's logging activities would not jeopardize the marbled murrelet ("1999 BiOp"). The Service subsequently issued the Take Permit and logging commenced.

  C. The New Information

  Plaintiffs premise their claims on new information which has emerged in the last few years.

  First, in two internal memoranda, the Service assessed the impacts of a 1997 and two 1999 oil spills off the coast of PALCO lands and southern Oregon. Pursuant to ESA section 10, the Service examined the effects of the spills to determine if the spills constituted "unforeseen circumstances" that require additional conservation measures. An April 2002 memorandum ("April 2002 Memo") authored by a Service biologist indicates her belief that the oil spills did in fact constitute such "unforeseen circumstances." In October 2002, a Service supervisor reviewed the April 2002 Memo and determined in a further memorandum ("October 2002 Memo") that the spills did not constitute an "unforseen circumstance" under the Conservation Plan and ESA. The October 2002 Memo ended the Service's ESA section 10 analysis of those oil spills.

  Second, in 2004 an independent environmental consulting group commissioned by the Service released an "Evaluation Report for the 5-Year Status Review of the Marbled Murrelet in Washington, Oregon, and California" ("McShane Report"), as required by the ESA. See 16 U.S.C. § 1533(c)(2). The McShane Report evaluated the status of the marbled murrelet by answering three primary questions: (1) whether there is a distinct population segment of the marbled murrelet in California, Oregon, and Washington; (2) whether there is new information about threats to the population; and (3) if there is new information, whether it suggests a change in the listed status. See Pl.'s Exh. C (McShane Report at ES-1-2). Based on a new population modeling methodology, the McShane Report ultimately determined that the "environmental baseline" for the marbled murrelet may be less favorable than the 1999 BiOp assumed.

  Third, according to plaintiffs, throughout the implementation of the Headwaters Accord, a "Conservation Plan Monitor" has documented as many as 325 PALCO violations of the Conservation Plan, Take Permit, and Implementation Agreement.

  Fourth, on September 20, 2005, the Service reinitiated internal consultation pursuant to ESA section 7 based on the McShane Report and "natural resource damage assessments" regarding the three oil spills. The letter indicating reinitiation was released simultaneously with a new biological opinion ("2005 BiOp"). The 2005 BiOp concluded that, in light of the new information, there are still no "impacts to [marbled murrelets] that are not identified and considered in the [1999 BiOp]," and that "continued operations under the PALCO [Take Permit] are not likely to jeopardize the continued existence of the marbled murrelet." 2005 BiOp Cover Letter at 19.


  Plaintiffs subsequently filed this lawsuit against PALCO and Federal Defendants making thirteen claims for relief pursuant to the ESA, NEPA, Clean Water Act, and California unfair business practices laws. Federal Defendants and PALCO filed motions to dismiss several of the claims for relief.

  The Court dismissed the third and eighth claims without leave to amend and dismissed the second claim for relief under NEPA with leave to amend. With respect to the NEPA claim, the Court held that plaintiffs had not adequately pled an ongoing "major federal action" that would require Federal Defendants to prepare a supplemental EIS. The Court stayed its dismissal of the ninth, tenth, eleventh, twelfth, and thirteenth claims for relief, all regarding the California unfair business practices laws, pending a California Supreme Court ruling on whether Proposition 64 applies retroactively.

  Plaintiffs filed a second amended complaint ("SAC") which repled all claims for relief, including those dismissed with prejudice, and added a fourteenth claim for unlawful business practices.*fn1 Federal Defendants subsequently moved for dismissal/summary judgment on the second and seventh Claims for Relief. That motion is pending before the Court.

  After the Service issued its 2005 BiOp, plaintiffs amended their complaint to add a fifteenth claim for relief under the Administrative Procedures Act ("APA") alleging that the 2005 BiOp's "no jeopardy" determination was arbitrary and capricious. Plaintiffs also moved for a preliminary injunction under the fifteenth and second claims to enjoin PALCO's logging activities. This motion, too, is pending before the Court.


  After evaluating all the briefs and the administrative record, and having the benefit of oral argument, the Court GRANTS Federal Defendants' motion for summary judgment on the second and seventh claims for relief, and DENIES plaintiffs' motion for a preliminary injunction.


  I. Motion to Dismiss/for Summary Judgment on NEPA claim

  Federal Defendants move to dismiss the NEPA claim (second claim for relief) on the ground that the complaint does not allege any proposed or ongoing "major federal activity" which would trigger a duty to prepare a supplemental EIS. Plaintiffs respond that major federal actions still exist: (1) under the management regime prescribed by the Conservation Plan/Take Permit/Implementation Agreement, sometimes referred to as "adaptive management;" and (2) as a result of changes the 2005 BiOp made to the Conservation Plan/Take Permit.

  A. Legal Requirements for a Supplemental EIS

  "NEPA mandates that federal agencies prepare an EIS for major federal actions `significantly affecting the quality of the human environment.' 42 U.S.C. § 4332(2)(C)." Cold Mountain v. Garber, 375 F.3d 884, 892 (9th Cir. 2004) (emphasis added); see also Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55, 124 S.Ct. 2373, 2384 (2004) ("NEPA requires a federal agency to prepare an environmental impact statement (EIS) as part of any `proposals for legislation and other major Federal actions significantly affecting the quality of the human environment.'"). "NEPA also imposed on federal agencies an ongoing duty to issue supplemental environmental analyses." Cold Mountain, 375 F.3d at 892. Supplementation is required where "`[t]here are significant new circumstances or information relevant to environmental concerns and bearing on the proposed action or its impacts.'" Southern Utah Wilderness Alliance, 542 U.S. at ___, 124 S.Ct. at 2384 (citation omitted) ("SUWA").

  The federal regulations implementing NEPA define the level of federal involvement necessary to require an EIS as follows:
"Major Federal action" includes actions with effects that may be major and which are potentially subject to Federal control and responsibility. . . . [Actions include] [a]pproval of specific projects, such as construction or management activities located in a defined geographic area. Projects include actions approved by permit or other regulatory decision as well as federal and federally assisted activities.
40 C.F.R. 1508.18.

  B. Adaptive Management

  Plaintiffs allege that the "adaptive management" set forth in the Conservation Plan/Take Permit/Implementation Agreement create four ongoing obligations of Federal Defendants that constitute "major federal action" under NEPA. Federal Defendants must: a. Review, consult, and approve, deny or direct modifications of all activities that are proposed near occupied murrelet stands to ensure that the disturbance of the ...

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