## Facts

- Section 7(a)(2) of the Endangered Species Act (ESA) requires federal agencies to consult with the U.S. Fish and Wildlife Service (FWS) or the National Marine Fisheries Service before taking an action that may affect a listed species or its critical habitat.
- The U.S. Bureau of Reclamation (Bureau) manages the Central Valley Project (CVP), a large federal water project in California whose operations affect the Sacramento–San Joaquin Delta.
- The Delta is habitat for the delta smelt, a fish listed as threatened under the ESA.
- In the early 2000s, the Bureau prepared an Operations Criteria and Plan (OCAP) to guide CVP operations and to provide a basis for renewing long-term CVP water-service contracts that were nearing expiration.
- Under the contract renewal provisions, the quantity of water to be delivered was the only predetermined term; renewals themselves were not mandatory.
- Because of potential effects on the delta smelt, the Bureau initiated ESA consultation with FWS.
- In 2004, FWS issued a biological opinion concluding the OCAP would not jeopardize the delta smelt; a court later invalidated that biological opinion.
- In 2005, FWS issued a revised biological opinion again finding no jeopardy; a court later invalidated the revised biological opinion as well.
- After the invalidations, the Bureau prepared its own biological assessments and consulted with FWS through a series of letters. The letters concurred with the Bureau’s “no jeopardy” assessments, but did not analyze effects beyond what had been addressed in the two invalidated biological opinions.
- Relying on those concurrence letters, the Bureau renewed many long-term CVP water-service contracts.
- In 2008, FWS issued another revised biological opinion that contradicted the earlier no-jeopardy conclusions and found that the OCAP would jeopardize the delta smelt.
- Natural Resources Defense Council and other environmental organizations challenged 41 renewed contracts, alleging the Bureau failed to satisfy ESA § 7 consultation duties.
- The district court held the Bureau did not have to consult under ESA § 7 for the challenged renewals because the Bureau’s discretion in renegotiating the contracts was substantially constrained.
- The plaintiffs appealed; the Ninth Circuit heard the case en banc.

## Issues

1. Whether the Bureau’s renewal of the challenged long-term CVP water-service contracts was an “agency action” requiring ESA § 7(a)(2) consultation, given the scope of the Bureau’s discretion at renewal.
2. If consultation was required, whether the Bureau’s consultation approach (biological assessments and FWS concurrence letters following invalidated biological opinions) satisfied ESA § 7(a)(2) for the challenged renewals.

## Decision

- The Ninth Circuit (en banc) reversed the district court’s determination that no ESA § 7(a)(2) consultation was required for the 41 contract renewals.
- The court held that the renewals involved “agency action” subject to § 7(a)(2) because the Bureau retained “some discretion” in deciding whether and on what terms to renew, and that discretion could be exercised in a manner that benefits the delta smelt.
- The court remanded for further proceedings consistent with its ruling, leaving additional record-specific questions about consultation adequacy and remedies to be addressed on remand.

## Legal Principles

- ESA § 7(a)(2) consultation is required for an agency action that may affect a listed species or critical habitat when the agency retains “some discretion” to influence the action in a way that could benefit the species.
- Consultation is excused only when the agency lacks discretion to act for the benefit of the species (i.e., where the agency is truly bound to act in a fixed manner and cannot impose conditions or choose among alternatives relevant to species protection).
- Renewing long-term contracts can constitute an ESA-triggering agency action when renewal is not mandatory and the agency has authority at renewal to make choices beyond a purely ministerial act.
- When a district court resolves a case on the threshold ground that § 7 does not apply, an appellate court may remand for the district court to address remaining questions tied to the sufficiency of consultation and appropriate relief.

## Conclusion

Natural Resources Defense Council v. Jewell held that the Bureau of Reclamation’s renewal of long-term CVP water-service contracts triggered ESA § 7(a)(2) consultation duties because the Bureau retained some discretion at renewal that could be used to benefit the threatened delta smelt, and the Ninth Circuit reversed the district court’s contrary ruling and remanded for further proceedings.


Natural Resources Defense Council v. Jewell, 749 F.3d 776, cert. denied, 574 U.S. 1011 (2014)