## Facts

- A city proposed construction of a large business/industrial park on a 678-acre site containing vernal pools and wetlands that support federally listed species and designated critical habitat.
- Because the project required discharging fill into wetlands, the project required a Clean Water Act (CWA) § 404 permit from the U.S. Army Corps of Engineers.
- The presence of listed species triggered Endangered Species Act (ESA) § 7 consultation with the U.S. Fish and Wildlife Service (FWS).
- The city prepared an environmental review and alternatives analysis and identified the proposed site as the least environmentally damaging practicable alternative (LEDPA) for meeting the project’s purpose.
- The Corps issued the § 404 permit after applying the § 404(b)(1) Guidelines, including the presumption that practicable alternatives exist for non-water-dependent projects in wetlands, and concluding the proposed site was the LEDPA.
- FWS issued a biological opinion concluding the project would not jeopardize listed species and would not adversely modify critical habitat, relying on mitigation measures such as habitat preservation and restoration/creation.
- An environmental organization challenged the agencies’ decisions, asserting the agencies understated habitat loss and overstated mitigation effectiveness.

## Issues

1. Whether the Corps acted arbitrarily and capriciously under the APA by defining the project purpose and rejecting alternative sites in concluding the permitted site was the LEDPA under the CWA § 404(b)(1) Guidelines.
2. Whether FWS acted arbitrarily and capriciously under the APA in concluding the action would not adversely modify critical habitat under the ESA, including whether it applied an unlawfully narrow adverse-modification standard and inadequately analyzed effects and mitigation.

## Decision

- The Ninth Circuit affirmed summary judgment for the Corps, FWS, and the city.
- The court held the Corps reasonably defined the overall project purpose, applied the regulatory presumption applicable to non-water-dependent projects, and supported its LEDPA determination with a reasoned alternatives analysis grounded in cost, technology, logistics, and environmental effects.
- The court held FWS’s biological opinion was not arbitrary or capricious because it evaluated impacts on both species survival and recovery and on the conservation value of critical habitat, and it rationally explained why mitigation supported no-jeopardy and no-adverse-modification findings.

## Legal Principles

- Under APA review, courts uphold agency action if the agency considered relevant factors and articulated a rational connection between the facts found and the decision; courts do not reweigh evidence or substitute their judgment.
- Under the CWA § 404(b)(1) Guidelines, a permit may not issue if a practicable alternative exists with less adverse impact on the aquatic ecosystem; practicability considers cost, existing technology, and logistics in light of the overall project purpose.
- For non-water-dependent projects proposing discharges into wetlands, the Corps must apply a presumption that practicable alternatives exist, but may approve the proposed site if the administrative record supports a reasoned LEDPA determination.
- Under ESA § 7, an adverse-modification analysis must address effects on the conservation value of critical habitat, including the species’ recovery prospects, not solely short-term survival.
- FWS may rely on mitigation and scientific projections when it explains its methodology and conclusions and the record supports the judgment.

## Conclusion

The Ninth Circuit upheld federal approvals for the wetland-fill project, concluding that the Corps’ LEDPA determination under the CWA and FWS’s no-jeopardy/no-adverse-modification determinations under the ESA were supported by a reasoned administrative record and therefore were not arbitrary or capricious under the APA.


Butte Env't Council v. U.S. Army Corps of Eng'rs, 620 F.3d 936 (9th Cir. 2010)