## Facts

- The Cabinet Mountains Wilderness Area in northwestern Montana provides habitat for grizzly bears, a threatened species under the Endangered Species Act (ESA), and contains areas used for feeding and denning.
- ASARCO held a block of unpatented mining claims in and near the wilderness and proposed an exploratory drilling program.
- The U.S. Forest Service prepared an Environmental Assessment (EA) and related biological materials evaluating effects on grizzly bears and “secure habitat,” focusing on risks from added human presence and human–bear encounters.
- The EA identified a serious risk to secure habitat and included 14 mitigation recommendations, including: limits on where and when work could occur; seasonal and time-of-day restrictions; restrictions on helicopter use; and prohibitions on firearms, overnight camping, and littering.
- The Forest Service initiated ESA § 7 consultation with the U.S. Fish and Wildlife Service (FWS).
- FWS issued a biological opinion agreeing that loss of secure habitat was a major concern and advised that the Forest Service’s restrictions be strictly observed; FWS also recommended added measures such as shortening the operating season, closing certain roads, and rescheduling or canceling certain timber sales to address cumulative effects.
- FWS concluded that, with the combined restrictions and compensatory measures, the adverse effects (including cumulative impacts) would be fully compensated.
- The Forest Service adopted the FWS recommendations in its final decision, issued a Finding of No Significant Impact (FONSI), and determined that an Environmental Impact Statement (EIS) was not required.
- Environmental groups challenged the approval under NEPA and the ESA; the district court granted summary judgment to the Forest Service and ASARCO, and plaintiffs appealed.

## Issues

1. Whether the Forest Service violated NEPA by issuing a FONSI and declining to prepare an EIS for the exploratory drilling project, given grizzly bear habitat impacts and the agency’s reliance on mitigation and compensation measures.
2. Whether the Forest Service’s ESA § 7 determinations (including reliance on the FWS biological opinion and mitigation/compensation package) were reviewable under the APA’s arbitrary-and-capricious standard and, under that standard, were lawful.

## Decision

- The D.C. Circuit affirmed the district court’s judgment for the Forest Service and ASARCO.
- The court upheld the Forest Service’s decision not to prepare an EIS, concluding the agency took a hard look, identified the relevant environmental concerns (including cumulative impacts), and reasonably found no significant impact in light of specific mitigation and compensatory measures incorporated into the project.
- The court held that ESA-related agency action is reviewed under the APA’s arbitrary-and-capricious standard (not de novo), and the Forest Service did not act arbitrarily or capriciously in concluding the project, as conditioned, would not jeopardize the grizzly bear.

## Legal Principles

- Agency compliance with NEPA and ESA is reviewed under the Administrative Procedure Act’s “arbitrary and capricious” standard unless Congress supplies a different standard.
- Under NEPA, an EIS is required only for actions with “significant” environmental effects; an EA may support a FONSI when the agency provides a reasoned explanation based on the record.
- In the D.C. Circuit, review of a no-EIS decision asks whether the agency: (1) took a hard look; (2) identified the relevant areas of environmental concern; (3) made a convincing case that impacts were insignificant; and (4) if significant impacts appeared, showed that project changes reduced impacts to a non-significant level.
- Mitigation and compensatory measures may be considered in deciding significance when they are made part of the project in a concrete, binding way; agencies may not treat speculative or unenforced mitigation as a substitute for preparing an EIS.
- ESA § 7 is satisfied when the action agency completes consultation and reasonably relies on the FWS biological opinion and related measures; courts generally defer to agency judgments on technical matters when the record shows reasoned decisionmaking.

## Conclusion

The D.C. Circuit upheld the Forest Service’s approval of ASARCO’s exploratory drilling because the agency’s EA directly addressed risks to grizzly bear secure habitat and cumulative impacts, the final decision incorporated specific mitigation and compensatory measures recommended through ESA § 7 consultation, and the resulting FONSI and no-jeopardy determination were not arbitrary or capricious.


Cabinet Mountains Wilderness v. Peterson, 685 F.2d 678 (1982)