February 17, 2009

the delta smelt and Sacramento River settlement contracts

By the delta smelt and Sacramento River settlement contracts

When it comes to the threatened delta smelt species, most of the attention has focused on the pumps that export water from northern California southward and the extent to which pumping should be restricted for the benefit of the smelt. Litigation in the Eastern District of California led to the invalidation of a 2005 biological opinion due the BiOp's inadequate consideration of how coordinated state and federal water operations would affect the smelt.

What has largely gone unnoticed in that same litigation, however, are the claims relating to water deliveries that occur upstream of the pumping. Earthjustice, Natural Resources Defense Council, and other environmental organizations argue that the Bureau of Reclamation has unlawfully executed and is illegally implementing 28 long-term Sacramento River settlement renewal contracts because it failed to engage in Endangered Species Act Section 7 consultations for these contracts.

The story behind these settlement contracts is complex, but the main thing to understand is that Reclamation needed to enter into a settlement with Sacramento River water users if it was going to satisfy the needs of the federal Central Valley Project and avoid litigation. Judge Oliver Wanger, who is overseeing the current delta smelt litigation, has noted that the United States and water users entered into the "Settlement Contracts" in order to "avoid conflict while preserving the right of either party in any subsequent water right litigation."

The issue presented by the environmental orgs' second complaint in this case is whether Reclamation is obligated to engage in Section 7 consultation when it renews the settlement contracts or if instead the water deliveries under those contracts are mandatory, thus exempting the need for consultation under NAHB v. Defenders of Wildlife.

There have been a couple of developments on this front. In November, Judge Wanger allowed the environmental plaintiffs' claims to go forward (decision available here), noting that there is an issue as to the amount of discretion used by Reclamation: "If the SRS Contractors held adjudicated senior rights to divert water in a finite quantity from the Sacramento River, and the SRS Contracts simply embodied the Bureau's obligations to ensure that its operation of the CVP did not impeded the SRS Contractors' specifically quantified senior rights, the Bureau would lack discretion under Home Builders and any section 7(a)(2) challenge to the SRS Contracts would be barred. However, the SRS Contracts were formed only after negotiation reflecting compromise over terms as to quantity of water to be delivered and timing of deliveries, over which the Bureau exercised some degree of discretion."

To fully resolve the applicability of Home Builders to this case, Judge Wanger ruled that

it is necessary for the Federal Defendants and/or the Settlement Contractors to present evidence on the nature and extent of their claimed senior water rights. If, arguendo, this evidence establishes that the Settlement Contractors hold senior rights to a certain volume of water, it is appropriate to determine as a matter of law that the Bureau lacks any discretion under Home Builders over that volume of SRS Contract water.

The plaintiffs felt that this November ruling was enough to warrant summary judgment and that a hearing on the nature and extent of claimed senior water rights was unnecessary.  Accordingly, late last month they filed a motion for interlocutory appeal or, in the alternative, for reconsideration of the November decision (available here).  In part, the plaintiffs argued that they were entitled to summary judgment, as "[t]he remaining question posed by the Court is strictly a question of law: was BOR's exercise of discretion constrained by statute, as required by NAHB, when the vast majority of the Settlement Contractors' claimed water rights were unadjudicated and disputed at the time the contracts were renewed?"

Last week, Judge Wanger denied the alternative motions, ruling that the court has yet to fully hear factual matters that pertain to the Home Builders analysis:

The SRS Contractors have been laboring under the assumption that they will be given an opportunity to present evidence relevant to the extent of the United States' discretion over the renewal of the settlement contracts. . . . Until the district court has an opportunity to fully complete the Home Builders analysis, based in part on facts which will be presented in the ongoing proceedings, there is nothing for Plaintiffs to appeal. . . .

Plaintiffs are free to contribute their legal views and analysis in opposition to the SRS Contractors' evidence before the Home Builder's analysis is completed. Whether Plaintiffs are correct in their contention that Home Builders does not exempt the Bureau's compliance with the ESA because the agency exercised discretion to negotiate supply and quantity terms in the settlement renewal contracts must be fully heard and decided.

How the plaintiffs will react to this most recent ruling remains to be seen.  But there seems to be a decent chance that at least some part of the settlement contracts entered into by Reclamation will be ruled as discretionary.  In the end, the delta smelt could have a significant impact on water supplies upstream of the delta, in addition to the impact it has already had on water exports via pumping.

What to read next