## Facts

- The Department of the Interior and the National Park Service (NPS), acting through Yellowstone National Park, entered into a Cooperative Research and Development Agreement (CRADA) with Diversa Corporation, a private biotechnology company.
- The CRADA gave Diversa a nonexclusive right to conduct bioprospecting research in Yellowstone, including sampling and studying microbial organisms found in thermal features (such as geysers and hot springs) and other park ecosystems.
- Under the agreement, Diversa would pay Yellowstone an annual fee and share royalties tied to any commercial applications or products derived from the research.
- The CRADA included a statement of work describing cooperative research focused on cataloging and studying Yellowstone’s biological diversity; actual collection activities were subject to NPS controls and required authorizations.
- Edmonds Institute, a nonprofit organization focused on biodiversity protection, along with two other environmental organizations and a frequent Yellowstone visitor, sued Secretary of the Interior Bruce Babbitt and NPS officials.
- Plaintiffs challenged the government’s authority to enter the CRADA, arguing it violated the Federal Technology Transfer Act of 1986 (FTTA) because Yellowstone was not a “laboratory” as the FTTA uses that term, and because the CRADA’s fee-and-royalty terms reflected unlawful commercial use of park resources.
- Plaintiffs also challenged the adequacy of NEPA review for the CRADA and sought relief under the Administrative Procedure Act (APA).
- The case was before the U.S. District Court for the District of Columbia on cross-motions for partial summary judgment.

## Issues

1. Whether the FTTA authorized Interior/NPS to enter a CRADA for bioprospecting at Yellowstone, including annual payments and royalty sharing tied to downstream commercial use.
2. Whether Yellowstone qualifies as a “federal laboratory” for FTTA purposes even though it is not exclusively (or primarily) a research facility.
3. Whether NEPA required preparation of an environmental impact statement (EIS), rather than an environmental assessment (EA) and finding of no significant impact (FONSI), for the Yellowstone–Diversa CRADA.
4. Whether Interior/NPS acted arbitrarily or capriciously under the APA in approving the CRADA and associated NEPA documentation.

## Decision

- The court granted defendants’ motion for summary judgment and denied plaintiffs’ motion for summary judgment.
- The court held that the FTTA permitted the government to use a CRADA for cooperative research with a private entity and did not bar payment and royalty provisions where authorized by the statute.
- The court concluded Yellowstone could qualify as a “laboratory” under the FTTA because substantial research activity and staffing existed within Yellowstone; the FTTA did not require the entire facility to be devoted to research.
- The court upheld the agency’s NEPA approach, concluding that the EA and FONSI were sufficient on the record and that an EIS was not required.
- Applying the APA’s deferential standard, the court found the agency’s decisionmaking adequately reasoned and lawful.

## Legal Principles

- Under the FTTA, an agency may enter a CRADA with a non-federal party to conduct cooperative research and may include consideration such as payments and royalty sharing when consistent with the statute’s terms.
- A “federal laboratory” under the FTTA can include a federal facility or organizational unit that performs significant research functions; the statutory term is not limited to stand-alone research campuses or sites devoted only to research.
- NEPA requires an EIS only for major federal actions that significantly affect the quality of the human environment; an EA and FONSI can satisfy NEPA where the agency reasonably finds no significant impact.
- In APA review of agency action, a court asks whether the agency stayed within statutory bounds, considered the relevant factors, and explained a rational basis; the court does not substitute its policy judgment for the agency’s.

## Conclusion

Edmonds Institute v. Babbitt upheld Interior and NPS’s authority to enter a Yellowstone bioprospecting CRADA with Diversa under the FTTA, rejected the argument that Yellowstone could not be treated as a “laboratory,” and sustained the agency’s NEPA review using an EA and FONSI, concluding that the government’s actions were not arbitrary or capricious under the APA.


Edmonds Institute v. Bruce Babbitt, Secretary of the Interior, 93 F. Supp. 2d 63 (2000)