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Sierra Pacific Industries, et al v. United States Department of Agriculture

December 22, 2011



This matter is before the court on the motion of plaintiffs to supplement the administrative record. (ECF 24.) At oral argument on the motion, held December 14, 2011, Elizabeth Stallard and Annie Amaral appeared for plaintiff Sierra Pacific Industries; Phillip Bonotto appeared for plaintiff Howell; Richard Linkert appeared for plaintiff W.M. Beaty and Associates, Inc. Todd Pickles appeared for the government. Defendant United States Department of Agriculture ("USDA") has opposed the inclusion of some documents in the record and has not opposed that of others. (ECF 27.)


Plaintiffs are currently engaged in litigation in state and federal court related to forest fires that occurred in 2007. The sole issue in this case is whether defendant USDA violated the Administrative Procedures Act, 5 U.S.C. § 701, et seq. ("APA"), when it made the decision to not allow agency employees to be deposed or testify in the state action. The USDA has internal regulations ("Touhy regulations") governing the decision whether to make agency employees available to participate in state proceedings. See United States ex rel Touhy v. Ragen, 340 U.S. 462 (1952). The USDA's Touhy regulations provide that the following factors should be considered:

(i) what interest of USDA would be promoted by the employee's testimony; (ii) whether an appearance would result in unnecessary interference with the duties of the USDA employees; (iii) whether an employee's testimony would result in the appearance of improperly favoring one litigant over another.

7 C.F.R. § 1.214(e)(1). On a rolling basis, the USDA has denied plaintiffs' requests for access to agency employees related to the state action. The USDA provides the following reasons: (1) the depositions and subsequent testimony could interfere with the employees' duties, (2) allowing them to testify would create the appearance of favoring one litigant over another, and (3) testimony in the state court case would be cumulative to the testimony in the federal case. (See, e.g., ECF 24-5 at 21-24.)

On May 9, 2011, plaintiffs filed suit in this court claiming the USDA's decisions made pursuant to its Touhy regulations violate the APA. (ECF 1.) On November 18, 2011, plaintiffs filed an amended complaint. (ECF 20.) The USDA filed the administrative record on November 4, 2011 (ECF 18) and on November 23, 2011, plaintiffs challenged the record as incomplete. (ECF 24.)


In considering actions brought in accordance with the APA, the court "will reverse the agency action only if the action is arbitrary, capricious, an abuse of discretion, or otherwise contrary to law." Lands Council v. Powell, 395 F.3d 1019, 1026 (9th Cir. 2005). "An agency's action is arbitrary and capricious if the agency fails to consider an important aspect of a problem, if the agency offers an explanation for the decision that is contrary to the evidence, if the agency's decision is so implausible that it could not be ascribed to a difference in view or be the product of agency expertise, or if the agency's decision is contrary to the governing law." Id. (citation omitted). The court may not "'substitute [its] judgment for that of the agency'" and "must uphold the agency's decision if the agency considered the relevant factors and made no clear error of judgment." Ctr. for Biological Diversity v. United States Fish & Wildlife Serv., 450 F.3d 930, 934 n.4 (9th Cir. 2006) (quotation omitted).

Although courts are limited to the administrative record existing at the time of the agency decision in reviewing that decision, the Ninth Circuit has found four exceptions to this rule: "(1) if admission is necessary to determine whether the agency has considered all relevant factors and has explained its decision, (2) if the agency has relied on documents not in the record, (3) when supplementing the record is necessary to explain technical terms or complex subject matter, or (4) when plaintiffs make a showing of agency bad faith." City of Las Vegas, Nev. v. F.A.A., 570 F.3d 1109, 1116 (9th Cir. 2009). Plaintiffs rely on the first exception for the majority of the materials at issue in this motion. The disputed materials fall into three categories, discussed below.

A. Correspondence between USAO and Plaintiffs

The United States Attorney's Office for the Eastern District of California ("USAO") exchanged four letters with plaintiffs in which it discussed the rationale for the USDA's decision regarding the depositions. Ms. Birkey, an attorney with the USDA, was copied on three of the four letters. There is no evidence the fourth letter was ever received by the USDA. Plaintiffs argue these letters should be included in the record. The USDA argues they were between the USAO and the plaintiffs, did not affect the USDA's decision-making and, therefore, are not properly part of the record. USDA suggests that plaintiffs must prove the letters were actually relied upon in order to justify inclusion in the record.

Plaintiffs rely on Thompson v. U.S. Dept. of Labor, 885 F.2d 551 (9th Cir. 1989), for the proposition that correspondence related to a pending agency decision should be included as part of the record. In Thompson, the dispositive inquiry was whether the correspondence was before the decision maker, the Secretary of Labor, when the decision was made. In that case, because the letters were submitted along with a motion for reconsideration to the agency and were relied upon by the decision maker, the court concluded that "[t]hese materials were considered by the Secretary, either directly or indirectly, during Thompson's motion for reconsideration, and consequently are properly part of the administrative record." Id. at 556. Because the three letters on which Ms. Birkey was copied address the subject matter at issue in this case and were before the decision-making agency, plaintiff's motion is granted with respect to this correspondence. Therefore, the following letters shall be included in the record:

* February 4, 2011 correspondence from Todd A. Pickles to William R. Warne (copy to Rachel Birkey);

* March 21, 2011 correspondence from Todd A. Pickles to William R. Warne (copy to Rachel Birkey); and

* March 24, 2011 correspondence from William R. Warne to Todd A. Pickles (copy to Rachel Birkey).

With respect to the letter dated January 28, 2011, from William R. Warne to Kelli L. Taylor and Todd A. Pickles, there is no evidence it was before the USDA. Plaintiffs' ...

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