LL.M., J.D., McGeorge School of Law
Feb. 4, 2015
Nearly two-thirds of the California population and seven million acres of agricultural land receive water from the State Water Project (“SWP”) operated by the California Department of Water Resources (“DWR”) or the Central Valley Project (“CVP”) operated by the United States Bureau of Reclamation (Bureau) (SWP and CVP collectively referred to as “Projects”). In the Consolidated Delta Smelt Cases, two district court opinions for the Eastern District of California review a Biological Opinion (“BiOp”) issued in 2008 by the Fish and Wildlife Service (“FWS”) that placed restrictions on the Projects’ operations to protect endangered species. These BiOp-imposed restrictions greatly impacted the water supply that would otherwise reach millions of Californians.
In San Luis & Delta-Mendota Water Authority v. Jewell, an opinion issued on March 13, 2014, the Ninth Circuit Court of Appeals reversed two decisions issued by the federal district court for the Eastern District of California. The Ninth Circuit found that the lower court inappropriately created a “battle of the experts” in violation of the Administrative Procedure Act’s (“APA”) “arbitrary and capricious” standard of review. The “arbitrary and capricious” standard of review is in part designed to prevent a court from substituting its judgment for that of the expert agency. The standard limits the court to review of the administrative record before the agency at the time the agency made its decision. The agency’s decisions are “arbitrary and capricious” if it: (1) relies on factors outside of its authority; (2) fails to consider “an important aspect of the problem”; (3) offers an explanation that counters the evidence provided in the record; or (4) is so implausible that the decision could not arise from expertise.3
The Endangered Species Act (“ESA”) directs its implementing agencies to use the “best scientific and commercial data available” when developing a BiOp and, by extension, granting authority to incidentally take (e.g., injure or kill) a listed species.4 According to the Ninth Circuit, the exercise of “best scientific and commercial data available” is a restrictive mandate: it “merely prohibits [an agency] from disregarding available scientific evidence that is in some way better than the evidence it relies on.”5 An agency has met this standard so long as it used information readily available at the time it made its decision and explains its use of that information.6
To help a court review whether the agency gathered evidence using the “best scientific commercial data available,” a court may only admit expert witnesses, or extra-record evidence, under limited circumstances. Specifically, a court may appoint experts only under Federal Rule of Evidence (“F.R.E.”) 702 for the limited purposes of: (1) supplementing information to determine whether the agency considered all relevant factors; (2) determining whether the agency relied on documents unavailable in the record; (2) explaining technical terms or complex subjects; or (4) showing bad faith on the part of the agency.7 The courts warn that these exceptions should be approached with caution lest the “exception undermine the general rule.”8
Because the APA limits the court to review of the record, there is a tension between reviewing the record and the ESA’s mandated “best scientific and commercial date available.” The tension is whether collecting evidence to support a finding is sufficient or if the review requires a more intensive level of engagement. The interplay between the Ninth Circuit court and the lower Eastern District court in the Consolidated Delta Smelt Cases highlights this tension, as the Ninth Circuit finds the standard requires more deference to the agency than that given by the lower court.
The Consultation Process for the Projects
Once a species is listed as threatened or endangered, a federal agency must consult with FWS if its actions may affect that species or its critical habitat. Under the ESA, a species is considered “threatened” when it is “likely to become endangered within the foreseeable future” and “endangered” when it “is in danger of extinction throughout all or a significant portion of its range.”9 Section 7 of the ESA directs a federal agency to consult with FWS to determine whether a federal action must be altered to prevent jeopardy to a listed species or adversely modify its critical habitat.
In the Consolidated Delta Smelt Cases, the acting federal agency is the Bureau, in coordination with DWR, and the agency action is the operations of the Projects diverting water from the Delta to southern California, or “south of the Delta exports.”10 The Bureau describes Project operations via a set of standards known collectively as the Operational Criteria and Plan (“OCAP”). Implementation of OCAP is considered a federal action that requires the Bureau to consult with FWS, the federal resource agency charged with protection of the Delta smelt under the federal ESA.
If, after consultation and review of OCAP, FWS issues an opinion concluding that the agency action will result in “take,” FWS will then issue an Incidental Take Statement (“ITS”). If the opinion concludes that the “take” will jeopardize the continued existence of the species, FWS will identify a Reasonable and Prudent Alternative (“RPA”) in the BiOp. An RPA alters specific operations to reduce take and avoid jeopardy.
In 2008, FWS issued a jeopardy opinion for the impacts of the Projects’ operations on the Delta smelt. Three components in the RPA limited the amount of water that could be pumped from the Delta during certain times of the year. Components 1 and 2 provided an “if, then” framework to help determine which pumping restrictions, if any, should be placed on Project operations at a given time. Component 3 addressed fresh water flows needed to protect against high salinity levels. These three components are designed to protect against adverse impacts to the Delta smelt and its critical habitat, especially during spawning.
The water users, DWR and the Bureau, argued that FWS failed to use the “best scientific and commercial data available” to reach its conclusions. The water users argued that this improper use of science resulted in overly restrictive RPAs that halted project operations without providing adequate scientific evidence that these restrictions met the particular needs of the Delta smelt.
Ninth Circuit Standard of Review
Under the APA’s “arbitrary and capricious” standard of review, a court must defer to federal agency action, including the issuance of a BiOp by FWS. The standard of review requires the court to inquire only whether the agency collected evidence and considered factors to come to conclusions rationally related to those factors.11 The ESA, in turn, requires agencies to base their decisions on “best scientific and commercial data available.” According to the Ninth Circuit, the question of what type of information constitutes the “best scientific and commercial data available”12 belongs to the agency’s “special expertise,” and “when examining this kind of scientific determination… a reviewing court must generally be at its most deferential.”13
According to Ninth Circuit Court of Appeals, the ESA’s requirement to rely on the “best scientific and commercial data available” is a fairly unrestrictive mandate: the requirement “merely prohibits [an agency] from disregarding available scientific evidence that is in some way better than the evidence it relies on.”14 Further, “insufficient or incomplete information does not excuse an agency’s failure to comply,” but “where the information is not readily available, we cannot insist on perfection” because “best scientific and commercial data available” does not mean “best scientific data possible.”15
Because the “arbitrary and capricious” standard asks only whether the agency made a reasoned decision based on the evidence provided by the acting agency, a reviewing court’s scope of review for a BiOp is limited to the administrative record prepared by the agency — and not by evidence collected after the fact by a reviewing court.16 The Ninth Circuit cautions that there is a “danger” when the court goes beyond the record because the court begins to substitute its judgment for that of the agency.17 The record must be in existence at the time of the decision; moreover, the science that matters is only that which was available at the time the decision was made.18 However, there are exceptions to this rule; the exceptions allow a court to collect extra-record evidence to: (1) supplement to determine whether agency considered factors; (2) determining whether the agency relied on documents not found in the record; (3) explain technical terms or complex subjects; (4) or show bad faith on the part of the agency.19 The Ninth Circuit cautions that these exceptions must be used with caution to avoid allowing the “exception [to] undermine the general rule.”20
The Eastern District Court issued two separate opinions, as the ripeness of review varied for different components of the RPA. First, in 2010, the court reviewed BioOp Components 1 and 2 addressing flow levels to avoid pumping during Delta smelt spawning.21 Second, in 2011, the court’s review focused on Component 3 addressing fresh water flows needed to protect against high salinity levels, which would adversely impact the critical habitat of the Delta smelt.22 The court ruled similarly in both opinions and overturned the BiOp. It held FWS’s choices could not be rationally connected to facts found in the record because the facts were based on scientifically flawed flow model comparisons. Therefore, the court held, FWS “committed a clear error of judgment” by acting unreasonably when it failed to use the “best scientific and commercial data available” to draw its conclusions — false conclusions that negatively impact both the Delta smelt and over seven million people that rely on Project water.23
On appeal, the Ninth Circuit reversed the lower court opinions. The Ninth Circuit found that the district court failed to observe the narrow application of the extra-record exceptions. The Ninth Circuit noted that during the lower court proceeding, there were four experts appointed by both parties admitted under F.R.E. 702, but the district court did not limit itself to these experts.24 Instead, the district court created a “battle of the experts” by admitting over forty expert declarations.25 According to the Ninth Circuit, “[e]ven a quick review of the D.C.’s opinion shows the appearance of an open record was a reality,”26 and that an open record is inappropriate because it “pits the experts against each other and resolves their contrary positions as a matter of scientific fact.”27 Essentially, according to the Ninth Circuit, even though the lower court’s findings were founded on expert opinions, the court simply did not have the authority to consider those opinions in making its decision. The Ninth Circuit held that the district court should have limited itself to the administrative record evidence relied on by FWS to develop the RPA, plus the testimony of the four experts appointed by the parties during the district court proceedings. The Ninth Circuit held that under the “best available science” standard, FWS was required only to demonstrate that it considered available evidence and, where it declined to rely on available evidence, to provide an explanation. It held that FWS had provided an adequate explanation.
The Ninth Circuit Court of Appeals upheld FWS’s explanation despite the fact that the court acknowledged that the BiOp was “not just a little bit of a mess, but, at more than 400 pages, a big bit of a mess… and the FWS knew it.”28 The court opined that the deadlines imposed on FWS were so strict that the “mess” was inevitable, but despite the mess, the court is limited to the “arbitrary and capricious” standard of review as to whether the jeopardy elements of the RPA are based on the “best scientific and commercial data available.”29
Application of “Best Scientific and Commercial Data Available” to Component 3 of the RPA
Component 3 of the RPAs in the 2008 BiOp measures the necessary salinity levels for a certain location in the Delta to provide suitable spawning habitat for the Delta smelt. This salinity level (“X2”) is controlled by Delta outflow, measured by the difference between the inflow from the Sacramento and San Joaquin Rivers and the amount of water exported through the Projects, which changes seasonally and annually. The district court found the BiOp’s conclusions about the location of X2 were arbitrary and capricious on two separate grounds. This article only addresses the first to illustrate the differences between the level of review applied by the district court versus the Ninth Circuit.
FWS used two models to compare future impacts of the Project on salinity levels in the Delta. Because of the results populated by these models, the BiOp found that the operations control the position of X2 and, therefore, drive degradation of the Delta smelt’s habitat. This conclusion was imbedded in the RPA to limit project exports during certain times of the year — directly affecting the survival of the Delta smelt and exports south of the Delta.
The two flow models used by FWS were not calibrated to produce an accurate comparison. Calibration ensures that a comparison of the results from one model is accurately scaled for a comparison with the results of another model. The question was whether knowledge that calibration did not occur should preclude FWS from making the comparison anyway. The district court held FWS has an affirmative responsibility to make accurate comparisons. Every scientist, both in the administrative record and during court proceedings, agreed that calibration was necessary to produce accurate results. The Ninth Circuit overturned the holding, opining that so long as the agency provides an explanation for why the comparison is considered valid, despite the lack of calibration, the analysis should be upheld.
The first model is CALSIM II, a computer simulation model developed by DWR and the Bureau that uses Central Valley hydrology from 1922-2003 to measure future operations. The CALSIM II model assumes that environmental regulation and non-Project water demands are fixed in its modeling scenarios, models Project operations monthly to provide daily simulations of operation, and uses the “ANN” mathematical method.30 The second model is the DAYFLOW model, used as a “historic baseline” for X2, which uses “past river flow, export pumping, precipitation, and estimated agricultural diversions form 1967 – 2007” to estimate outflow from the San Francisco Bay to the Delta.31 The DAYFLOW model accounts for changes in regulations that impact water demand, uses historical data to provide daily simulations of operation, and uses the KM method.32 The ANN and KM methods are different mathematical functions that compute the data entered by the agency. The comparison of these models was paramount to the conclusions FWS made about the Project’s impacts on salinity levels.
FWS compared the two models for the sole reason that the preferred method did not produce the desired results. When FWS measured future flow by comparing CALSIM II to DAYFLOW results, it knew that the comparison was not scientifically acceptable. The two models were based on different data and metrics and were not calibrated for the comparison. First, FWS ran the preferred method by comparing CALSIM II to CALSIM II but was unsatisfied when the comparison produced exact results, even though the inputs were very different. Because FWS did not favor the apparent inaccuracy of the first set of results, FWS compared CALSIM II to DAYFLOW and used those results as the basis for its conclusion that future Project operations would cause the X2 baseline to move upstream by ten to fifteen percent, relative to the historic point. This conclusion resulted in severe restrictions on Project exports, which were almost guaranteed to be inaccurate, though protective of the environment.
According to “everybody,” the method used was inaccurate because at a minimum, FWS should have accounted for the bias and calibrated the model before making a comparison.33 FWS knew these models were based on different assumptions and knew that they even used different metrics. According to the district court, the ESA directive is affirmative, and FWS is required to use scientifically and mathematically acceptable methods to compare models.
The district court held that FWS’s actions were arbitrary and capricious in comparing the two models because the method was not scientifically or mathematically acceptable; FWS is responsible for ensuring the accuracy of flow models, not just acknowledging the error. According to the district court, deference afforded to agencies under “best scientific and commercial data available” standard is not unlimited. For example, the court notes, an agency may not rely on “ambiguous studies as evidence” to support findings made under the ESA.34
Further, agency expertise is a presumption that may be rebutted if the agency’s decisions, based on scientific expertise, are not reasoned. Agencies may not disregard available scientific evidence over the evidence used by the agency; judicial review is not one of blind acceptance. Specifically, courts are not required to “defer to an agency conclusion that runs counter to that of other agencies or individuals with specialized expertise in a particular technical area.”35 Instead, a court should “reject conclusory assertions of agency ‘expertise’ where the agency spurns unrebutted expert opinions without itself offering a credible alternative explanation.”36 The district court explains “incomplete information… does not excuse the failure” when the agency could have completed more analysis, and FWS cannot “fail to develop projections of… activities which may indicate potential conflicts between development and the preservation of protected species.”37
In contrast, the Ninth Circuit’s rule established an unrestrictive and deferential, rather than affirmative, standard. The Ninth Circuit decided that FWS’s actions were not arbitrary and capricious because FWS did not have to choose one model over another, so long as it acknowledged and explained the scientific deviations. The decision to use one scientific model over another was not arbitrary simply because a flaw existed. Both comparisons were flawed, and the court held that the agency’s decision to choose one flawed comparison over another “is the kind of judgment to which we must defer.”38
The appellate court found that FWS was not required to conduct independent studies, or calibrate models and was only responsible for determining whether the models represented the “best scientific and commercial data [currently] available.”39 The court explained that because the use of models requires a high level of expertise, the court’s review is “at its most deferential,” and therefore, it was not compulsory for the agency to “invest the resources necessary to conduct the perfect study.”40
Even if FWS was required to conduct additional studies, FWS was responsible only for acknowledging evidence that was better than the evidence on which it relied. The Ninth Circuit focused on the district court’s conclusion that “no superior set of models had been identified” and decided the only question was whether the failure to calibrate the two models proved a lack of evidence. Since FWS did not have any other evidence on which it could rely on, it acted reasonably. The Ninth Circuit recognized the limitations of the comparison, but it held “FWS’s decision to use these two models together” did not prove a lack of evidence and was not arbitrary and capricious.”41
A court may reject the agency’s decision “only when the model bears no rational relationship to the characteristics of the data to which it is applied.”42 The court reviews “all agency choices with respect to models, methodologies, and weighing scientific evidence” only to ensure that the agency’s “choices [are] supported by reasoned analysis.”43 Even if the “inner workings and fundamental purposes” of the models were different, a comparison between them was acceptable so long as the comparison explicitly accounted for the differences.44 The analysis did not need to address each potential consequence because it would place an impossible burden on agencies. Applying the rule, the court acknowledged that ideally, FWS would have thoroughly discussed the possible issues arising from the comparison of DAYFLOW with CALSIM II. Nevertheless, the court held FWS provided a reasoned analysis explaining why the DAYFLOW model was used as the “next best available baseline” when the preferred method produced inaccurate results.45
The dissent took the position that although the district court was well-reasoned and did not err in its decision, FWS’s choice to use CALSIM II to DAYFLOW was not supported by reasoned analysis, and thus could not survive arbitrary and capricious review. The dissent noted that even the comments alerted FWS to this fact, and the only explanation provided by FWS was to say that the CALSIM II to CALSIM II comparison did not provide expected differences. Thus, according to the dissent, there was an abuse of discretion.
Analysis and Conclusion
The district court’s decisions and the Ninth Circuit’s opinion together highlight the tension between the ESA’s “best scientific and commercial data available” and the highly deferential “arbitrary and capricious” standard, especially with respect to the highly technical issues that often arise in the context of natural resources disputes. The Ninth Circuit arguably applied a less demanding standard of review than the district court, even though the courts purported to apply the same standard, and the dissent seems to agree. The Ninth Circuit’s relaxation of the standard of review is arguably at odds with the ESA directive for the agency to use the “best scientific and commercial data available.” The court’s application of the “arbitrary and capricious” standard of the APA nullifies the ESA’s “best available science” requirement because it does not permit a court to judge whether an agency exercised its expertise. According to the court, it may not “judge the wisdom or the scientific merit of the agency’s decision.”46 Under the district court’s standard, FWS had a responsibility to, at a minimum, calibrate the two models before comparing them. A more restrictive standard would impose the responsibility on FWS to create an acceptable model or an acceptable means of comparison.
On the other hand, the goal of the ESA is to ensure against ill-informed federal actions and to prevent extinction of species despite potentially enormous practical consequences. The courts have held that the ESA explicitly affords species the “highest of priorities” even if such protection sacrifices the “anticipated benefits of the project and of many millions of dollars in public funds.”47 Moreover, a court may not substitute its judgment for that of the agency, and the extensive cadres of new expert opinions admitted in the lower court arguably does just that. To allow all of these experts violates the fundamental rule under the “arbitrary and capricious” standard that courts should only review the science that was available at the time the agency’s decision is made. If a court may develop its own evidence, the court becomes the fact-finder rather than the agency, violating the separation of power between the judicial and executive branches.
Glossary of Abbreviations
|ESA||Endangered Species Act;|
|APA||Administrative Procedure Act|
|NMFS||National Marine Fisheries Service|
|FWS||Fish and Wildlife Service|
|ITS||Incidental Take Statement|
|RPA||Reasonable and Prudent Alternatives|
|CVP||Central Valley Project|
|SWP||State Water Project|
|DWR||California Department of Water Resources|
|Bureau||Department of the Interior’s Bureau of Reclamation|
|OCAP||Operational Criteria and Plan|
|X2||Salinity level controlled by Delta outflow|
1 San Luis & Delta-Mendota Water Authority v. Jewell 747 F.3d 581(9th Cir. 2014)(Judge Bybee overturned both of Judge Wanger’s decisions and clarified the appropriate standard of review and use of expert witnesses for Biological Opinions under section 7 of the Endangered Species Act); The Consolidated Delta Smelt Cases, 717 F.Supp.2d 1021 (E.D. Cal. 2010) (Judge Wanger undertook an injunction review for Reasonable and Prudent Alternative Component 2, Action 3 in the FWS 2008 Biological Opinion for the Delta Smelt regarding changes in flows triggered by certain events or impacts to Delta Smelt); In re Consolidated Delta Smelt Cases, 812 F.Supp.2d 1133, (E.D. Cal. 2011) judgment vacated, appeal dismissed (Aug. 23, 2012) (Judge Wanger undertook an injunction review for Reasonable and Prudent Alternative Component 3 in the FWS 2008 Biological Opinion for the Delta Smelt regarding salinity levels that jeopardize habitat for Delta smelt, an issue which was not ripe for review at the time of the 2010 opinion.)
2 California State Bar Licensed; LL.M. Water Resources Candidate 2014, McGeorge School of Law; J.D. 2013, McGeorge School of Law; B.B.A. 2009, Goizueta Business School, Emory University; Founder and Managing Advisor, California Water Law Journal. I would like to thank the California Water Law Journal for allowing me to utilize the journal as part of a directed study for the Water Resources LL.M. and for Jennifer Harder’s valuable suggestions and edits. This article does not represent the views of the California Water Law Journal, McGeorge School of Law, UC Davis King Hall School of Law, or any of the clients or firms with which I work.