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Trout v. Federal Energy Regulatory Commission

July 20, 2009

CALIFORNIA TROUT, PETITIONER,
v.
FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT.
CALIFORNIA TROUT, PETITIONER,
v.
FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT.
FRIENDS OF THE RIVER, PETITIONER,
v.
FEDERAL ENERGY REGULATORY COMMISSION, RESPONDENT.



On Petition for Review of an Order of the Federal Energy Regulatory Commission FERC Project Nos. 2426-204, 2426-206 & 2426-208.

The opinion of the court was delivered by: Bybee, Circuit Judge

FOR PUBLICATION

OPINION

Argued and Submitted February 12, 2009-San Francisco, California

Before: Ronald M. Gould, Jay S. Bybee, and Timothy M. Tymkovich,*fn1 Circuit Judges.

Opinion by Judge Bybee; Dissent by Judge Gould

OPINION

The Supreme Court has long stressed that "the formulation of procedures [is] basically to be left within the discretion of the agencies to which Congress [has] confided the responsibility for substantive judgments." Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 524-25 (1978). Agencies must have the ability to manage their own dockets and set reasonable limitations on the processes by which interested persons can support or contest proposed actions. In this respect, an agency's procedural rules operate much as our own rules of procedure do: we require litigants to observe the orderly procedures of the court, even if such rules occasionally bar inattentive or ill-advised parties from our courtrooms. So long as an agency's procedural rules do not afford petitioners less protection than the minimum mandated by the Administrative Procedure Act ("APA") and the Constitution, we are not free to "improperly intrude[ ] into the agency's decisionmaking process" and second-guess its administrative tradeoffs. Id. at 525.

In this case, petitioners California Trout ("CalTrout") and Friends of the River ("FOR") contend that the Federal Energy Regulatory Commission ("the Commission") applied its rule governing intervention in a license renewal proceeding in an arbitrary and capricious fashion. Although petitioners have set forth evidence that their late intervention would not prejudice the Commission's proceeding, under the circumstances we cannot find that the Commission's decision was an abuse of its discretion. The regulation at issue explicitly confers on the Commission a broad power to differentiate among untimely interveners and permits the Commission to summarily reject a prospective intervenor who cannot demonstrate "good cause" for its untimely motion. Because we find that the Commission reasonably determined that petitioners lacked good cause for their untimely attempt to intervene, we deny the petition for review.

I.

A.

Bufo microscaphus californicus, the arroyo southwestern toad, is a small (two to three inch) amphibian with light greenish gray or tan warty skin and dark spots. See Endangered and Threatened Wildlife and Plants; Determination of Endangered Status for the Arroyo Southwestern Toad, 59 Fed. Reg. 64,859 (Dec. 16, 1994) (codified at 50 C.F.R. pt. 17). The toad can usually be identified by its movement, which consists of hopping (as opposed to walking or leaping), and its high-pitched trill that adult males emit during courtship. Id. It is not an especially peripatetic species-adult toads generally range no farther than a mile or so from the streams where they breed, and none are known to live outside the state of California. See Endangered and Threatened Wildlife and Plants; Final Designation of Critical Habitat for the Arroyo Toad, 66 Fed. Reg. 9415 (Feb. 7, 2001) (codified at 50 C.F.R. pt. 17).

The arroyo toad is quite particular about its habitat. It only lives in rivers or large streams that have shallow, gravelly pools, sandy terraces, and minimal vegetative cover. 59 Fed. Reg. at 64,859. The adult toad deposits its eggs in these shallow pools, where the potentially destructive water current is at a minimum, and the young toads eventually leave the pools to forage for insects on the sandy terraces. Id. The larger toads often burrow into the sandy terraces to create shelter and to escape from the sun's potentially lethal heat. Id. For this reason, urbanization and the rapid construction of dams in California beginning in the 1900s (which altered the natural water flows on which the toad had come to depend) severely degraded the arroyo toad's habitat. Id. By the early 1990s, nearly 76 percent of the species' habitat had been degraded, see 66 Fed. Reg. at 9414, and almost all the existing toad populations were near extinction. 59 Fed. Reg. at 64,859.

One place where the remaining arroyo toads continued to dwell was Piru Creek, a stream that meanders south from northwestern Los Angeles County through eastern Ventura County until it drains into the Santa Clara River. The creek runs through two large lakes: the northern Pyramid Lake and the southern Piru Lake. The eighteen-mile stretch of creek between these two lakes is known as "Middle Piru Creek." This area of the creek is surrounded mainly by national forest land (the Angeles National Forest and the Los Padres National Forest) and is used primarily for recreational activities, chief among which is fly-fishing.

It is surprising that the species had managed to survive for so long in Middle Piru Creek. In 1968, as part of the California Aqueduct Project,*fn2 construction began on Pyramid Dam, a 408-foot earth and rockfill edifice intended to prevent the natural flow of water from Pyramid Lake into Middle Piru Creek. The dam was completed in 1973, and in 1978 the Commission licensed the California Department of Water Resources ("DWR") and the Los Angeles Department of Water and Power to operate the dam and an associated power plant. This license strictly regulated the minimum amount of water that DWR could release from the dam at any one time. As a result, the increased water flow emitted from Pyramid Dam significantly altered the character of Middle Piru Creek.

Article 52 of the original license created the minimum flow requirements for the release of water from Pyramid Dam: DWR was instructed to release a continuous flow of at least 5 cubic feet per second ("cfs") in the winter and spring and at least 10 cfs in the summer and fall. Although these guidelines were slightly altered in 1982 to require occasional higher minimum releases depending on the ambient air temperature, they remained essentially unchanged until a confluence of events in the early 1990s revealed their detrimental effect on the arroyo toad.

First, in 1992 and 1993, large inflows into Pyramid Lake required DWR to release water at approximately 25 cfs during some months. Then, on December 16, 1994, the arroyo toad was officially added to the federal endangered species list.*fn3

See 59 Fed. Reg. 64,859. Due to worries that large fluctuations in the minimum flow would destroy arroyo toad eggs and tadpoles (by stranding them on land when water flows suddenly dropped and by washing them away when water flows dramatically increased), DWR changed its operating procedures-using a steady flow of 25 cfs from April through August (when arroyo toads were breeding) and then slowly reducing the flow during the winter months (when the tad-poles had dispersed). Unfortunately, these operating procedures, which had the effect of creating unnaturally large flows during the summer months and unnaturally low flows during the winter months, did not appear to actually benefit the toad.

Indeed, evidence gathered during the new high flow regime indicated that the increased flows might actually be damaging to the arroyo toad. In 2003, the U.S. Fish and Wildlife Service informed DWR that these unnatural flows were probably causing the incidental take of the arroyo toad and deteriorating its habitat. Specifically, the large release of water in the summer months created abundant vegetative growth on the creek's banks and encouraged increased water velocities downstream. This allowed noxious arroyo toad predators, such as bullfrogs, crawfish, and large-mouth bass, to multiply throughout the creek. It also prevented the toads from reproducing effectively-the large water flow eliminated the gravelly pools in which the toads would normally lay their eggs, and had the more pernicious effect of washing downstream any unprotected eggs and tadpoles. The reduced flow of water in the winter months prevented the natural flooding that would scour vegetation and replenish the finer sediments that the arroyo toad preferred.

The large summer flows did benefit at least one species in Middle Piru Creek: rainbow trout. Because rainbow trout prefer cold water (and may die if water temperatures are too high) they benefit from a deeper (and hence cooler) habitat. Since 1999, DWR maintained a trout fishery in the upper part of Middle Piru Creek, known as "Frenchman's Flat," and stocked it annually with around 3000 pounds of rainbow trout. Also, a number rainbow trout inhabited the area immediately downstream from Pyramid Dam above Frenchman's Flat-a designated "catch-and-release" area popular with local anglers. Because a weir separated Frenchman's Flat from the catch-and-release area, those trout in the catch-and-release area were a naturally-reproducing population not related to the stocked fish.

To remedy the problems the new flow regime was creating for the arroyo toad, the Fish and Wildlife Service recommended that DWR return Middle Piru Creek to a "natural flow regime," in which water would be released from Pyramid Dam in accordance with the rate of flow from Upper Piru Creek into Pyramid Lake. DWR accordingly filed an application with the Commission on March 17, 2005, to amend its license and eliminate all minimum flow requirements so as to accurately simulate natural flows. It attached an Environmental Impact Report ("EIR") analyzing the effects of the natural flow regime on the wildlife of Middle Piru Creek. The EIR concluded that a natural flow regime would expand the arroyo toad's habitat and diminish the populations of arroyo toad predators. The report also concluded that populations of naturally-breeding trout (those inhabiting the catch-and-release area above Frenchman's Flat) would be adversely affected by the decreased flows. Because, however, DWR's analysis indicated that the naturally-reproducing trout were genetically identical to those stocked at Frenchman's Flat (and thus were descendants of hatchery-raised fish rather than a wild population), the EIR determined that this adverse impact would not be an environmentally significant one.

B.

On June 8, 2005, the Commission issued public notice of DWR's application for a license amendment. This public notice clearly established July 8, 2005 as the final date for filing comments or making motions (including motions to intervene) in the proceedings.

Neither CalTrout (an organization designed to preserve California's wild trout populations) nor FOR (an organization designed to preserve California's rivers) filed a motion to intervene by the deadline. CalTrout did submit numerous comments on the proposed license amendment: on March 26, 2005, it submitted a comment about compliance with the Clean Water Act; on April 15, 2005, it submitted a comment pointing out that the Fish and Wildlife Service had removed a portion of Piru Creek from the final critical habitat designation for the arroyo toad; and on July 8, 2005, it submitted a comment advising DWR that it needed to consult formally with certain federal agencies in order to comply with the Endangered Species Act. FOR failed to file any comments on the draft EIR.

The organizations' failures to intervene were not necessarily mistakes-at the time, the statutory milieu offered a separate avenue by which CalTrout and FOR could challenge the Commission's proceedings. CalTrout believed that the naturally-reproducing trout above Frenchman's Flat might be related to steelhead,*fn4 an endangered trout species. See Endangered and Threatened Species: Final Listing Determinations for 10 Distinct Population Segments of West Coast Steelhead, 71 Fed. Reg. 834 (Jan. 5, 2006) (codified at 50 C.F.R. pts. 223 & 224). CalTrout thought that this genetic relationship indicated that Middle Piru Creek could provide a genetic bank that the endangered steelhead could potentially use to propagate. Thus, CalTrout had expected to be able to challenge any Commission action under the Endangered Species Act because of its purported impact on steelhead. In January 2006, however, the National Marine Fisheries Service published its final rule on the designation of steelhead critical habitat under the Endangered Species Act. See Endangered and Threatened Species; Designation of Critical Habitat for Seven Evolutionarily Significant Units of Pacific Salmon and Steelhead in California, 70 Fed. Reg. 52,488, 52,581 (Sept. 2, 2005) (codified at 50 C.F.R. pt. 226). This final rule, unlike the proposed draft rule, did not list Middle Piru Creek as a critical habitat for steelhead. Such a designation would have required the Commission to consult with the National Marine Fisheries Service about protections for steelhead before implementing the proposed action*fn5 -and CalTrout and FOR would have had an opportunity to challenge aspects of this consultation. Because no actual steelhead inhabited Middle Piru Creek, the Service's final rule placed significant impediments on this avenue for judicial review.*fn6

Nearly twenty-one months after it issued public notice, on March 1, 2007, the Commission issued a draft Environmental Assessment ("EA") on the proposed license amendment and solicited public comments. Both CalTrout and FOR filed comments on the draft EA. About this same time, CalTrout and FOR also filed untimely motions to intervene in the proceedings. CalTrout moved to intervene on April 13, 2007 (twenty-one months after the July 8, 2005 deadline). FOR filed its motion to intervene on June 11, 2007 (twenty-three months after the deadline and two months after it filed comments on the draft EA).

The Commission considered and rejected the motions to intervene, holding that neither party had met the regulatory standard for filing a late intervention motion. Both parties sought rehearing on these decisions. The Commission denied CalTrout's request for rehearing on July 19, 2007. CalTrout sought a second rehearing, which was denied on September 20, 2007. The Commission denied FOR's rehearing request on February 21, 2008. Both parties petitioned for review in this court, arguing that the Commission abused its discretion in denying their late intervention motions.

CalTrout and FOR argue that because they clearly meet the regulatory standard for late intervention, the Commission acted arbitrarily and capriciously in denying their motions to intervene. Petitioners also argue that ...


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