Ninth Circuit Court of Appeals Rejects Challenges to 43 Federal Water Contracts

On July 17, 2012 the Ninth Circuit issued an important opinion rejecting challenges to the U.S. Bureau of Reclamation's renewal of 43 water contracts in 2004-2005.  The contracts at issue consisted of two general types - water service contracts in the Delta Mendota Canal Unit of the Central Valley Project and Sacramento River Settlement contracts. 

The case stems back to litigation over a 2005 biological opinion issued by the U.S. Fish and Wildlife Service on the effects of State and Federal water project operations on the threatened delta smelt.  That 2005 BiOp was challenged by environmental groups and ruled invalid by the district court.  In an attempt to ride the wave of that success, the same environmental groups then filed a supplemental complaint challenging the earlier contract renewals by the Bureau as invalid because they had partially incorporated the 2005 BiOp.  The district court rejected these claims because the water service contracts expressly provided and allowed for the Bureau to change CVP operations (including reducing deliveries) in any way required by the ESA, and therefore their execution and existence did not cause any actual harm to the delta smelt.  With respect to the settlement contracts, the district court generally found that the Bureau had no discretion to alter their terms and therefore the ESA consultation provisions did not apply to the renewal of those contracts. 

The Ninth Circuit Court of Appeals affirmed both district court rulings, rejecting challenges to both types of water contracts.  The opinion can be found here.

If you have any questions regarding this decision, please contact, Daniel J. O’Hanlon, Hanspeter Walter, or Rebecca Akroyd.