The New Realities of ESA Restrictions On SWP and CVP Water Supplies ACWA Spring Conference

The New Realities of ESA The New Realities of ESA Restrictions On SWP and CVP Restrictions On SWP and CVP

Water SuppliesWater Supplies

ACWA Spring ConferenceACWA Spring Conference

Greg WilkinsonGreg Wilkinson

Best Best & Krieger LLPBest Best & Krieger LLP

May 11, 2011May 11, 2011

PremisesPremises

• The ongoing litigation involving the fishery The ongoing litigation involving the fishery resources of the Sacramento-San Joaquin Delta resources of the Sacramento-San Joaquin Delta will have a major impact on future water supplies will have a major impact on future water supplies available to 2/3 of California’s population and the available to 2/3 of California’s population and the majority of its irrigated farmland.majority of its irrigated farmland.

• The outcome of the ongoing litigation will be an The outcome of the ongoing litigation will be an important factor affecting California’s emergence important factor affecting California’s emergence from the current recession.from the current recession.

• The ongoing litigation involving the Delta will The ongoing litigation involving the Delta will likely change the way the federal Endangered likely change the way the federal Endangered Species Act is administered and implemented in Species Act is administered and implemented in the future.the future.

The Sacramento-San Joaquin The Sacramento-San Joaquin DeltaDelta• The Delta is part of the largest estuarine The Delta is part of the largest estuarine

system on the west coast of the United system on the west coast of the United States.States.

• It is also the “Hub” of the two principal It is also the “Hub” of the two principal water supply projects in California – The water supply projects in California – The CVP and SWP – in the sense that it serves CVP and SWP – in the sense that it serves as the transfer point for water stored in as the transfer point for water stored in reservoirs north of the Delta for reservoirs north of the Delta for agricultural and urban water users within agricultural and urban water users within the Projects’ service areas.the Projects’ service areas.

The Delta NexusThe Delta Nexus

• The Delta also provides habitat to a The Delta also provides habitat to a variety of aquatic species; several of which variety of aquatic species; several of which have suffered recent declines in have suffered recent declines in abundance that are believed to be abundance that are believed to be substantial:substantial:

– Delta smeltDelta smelt

– Longfin smeltLongfin smelt

– Winter-run salmonWinter-run salmon

– Spring-run salmonSpring-run salmon

– Central Valley steelheadCentral Valley steelhead

The Delta Nexus The Delta Nexus (continued)(continued)

• All of these species are listed under either the All of these species are listed under either the federal ESA, the state ESA, or both.federal ESA, the state ESA, or both.

• There appear to be a variety of causes for the There appear to be a variety of causes for the relatively recent decline in species abundance:relatively recent decline in species abundance:

– Toxic run-off from Delta agricultureToxic run-off from Delta agriculture

– Ammonia discharges from Delta POTWs Ammonia discharges from Delta POTWs

– Predatory non-native speciesPredatory non-native species

– 2,200+ unscreened in-Delta agricultural diversions2,200+ unscreened in-Delta agricultural diversions

– Reductions in Delta in-flow from a variety of consumptive Reductions in Delta in-flow from a variety of consumptive uses including the City and County of San Francisco’s uses including the City and County of San Francisco’s Hetch-Hetchy Project, EBMUD, Modesto I.D., Turlock I.D. Hetch-Hetchy Project, EBMUD, Modesto I.D., Turlock I.D. and many others.and many others.

The Delta Nexus The Delta Nexus (continued)(continued)

• But, the SWP (and CVP) entrain all of the But, the SWP (and CVP) entrain all of the listed species and have proven to be listed species and have proven to be relatively easy to regulate, and the relatively easy to regulate, and the regulators – state and federal – have a regulators – state and federal – have a lengthy history of doing so.lengthy history of doing so.

Judicial/Regulatory Actions Affecting the SWP (and Judicial/Regulatory Actions Affecting the SWP (and CVP) Post 2006CVP) Post 2006

• The current The current statestate limitations on SWP/CVP limitations on SWP/CVP Delta operations are set forth in D-1641, Delta operations are set forth in D-1641, adopted by the SWRCB in 2000.adopted by the SWRCB in 2000.

• D-1641 judicially reviewed and largely D-1641 judicially reviewed and largely affirmed by the Court of Appeal in 2006 affirmed by the Court of Appeal in 2006 ((State Water Resources Control Board CasesState Water Resources Control Board Cases, , 136 Cal.App.4136 Cal.App.4thth 674, (so-called “Robie” 674, (so-called “Robie” decision))decision))

• In terms of water rights aspects of SWP In terms of water rights aspects of SWP operations, D-1641 forms a kind of “baseline” operations, D-1641 forms a kind of “baseline” against which subsequent regulatory and against which subsequent regulatory and judicial actions can be measured.judicial actions can be measured.

Regulation of the SWP / CVPRegulation of the SWP / CVP

• And, there has been a And, there has been a lotlot of regulatory and of regulatory and judicial activity since the “Robie” decision judicial activity since the “Robie” decision came down in early 2006.came down in early 2006.

Judicial / Regulatory Actions Judicial / Regulatory Actions Affecting the SWP (and CVP) post-Affecting the SWP (and CVP) post-20062006• Since the Robie decision, litigation and Since the Robie decision, litigation and

regulatory actions relating to the SWP and regulatory actions relating to the SWP and CVP have come in a series of waves.CVP have come in a series of waves.

• The first wave consisted of cases brought by The first wave consisted of cases brought by environmental organizations and commercial environmental organizations and commercial fishermen challenging biological opinions fishermen challenging biological opinions issued regarding SWP / CVP operations:issued regarding SWP / CVP operations:

– Natural Resources Defense Council, et al. v. KempthorneNatural Resources Defense Council, et al. v. Kempthorne, , Case No. 1:05-CV-01207 OWW (E.D. Cal).Case No. 1:05-CV-01207 OWW (E.D. Cal).

– Pacific Coast Federation of Fisherman’s Associations, et al. Pacific Coast Federation of Fisherman’s Associations, et al. v. Gutierrezv. Gutierrez, Case No. 1:06-CV-00245 OWW (E.D. Cal), Case No. 1:06-CV-00245 OWW (E.D. Cal)

Effect of Regulatory / Judicial Effect of Regulatory / Judicial ActionsActions• These cases resulted in an overturning of These cases resulted in an overturning of

biological opinions issued by the USFWS for biological opinions issued by the USFWS for the Delta smelt and by the NMFS for the the Delta smelt and by the NMFS for the salmon and steelhead.salmon and steelhead.

– TTwo trials on “Interim Remedies” (operational wo trials on “Interim Remedies” (operational limitations while new biological opinions developed) limitations while new biological opinions developed) were subsequently conducted by Judge Oliver were subsequently conducted by Judge Oliver Wanger.Wanger.

– The smelt interim remedy trial resulted in The smelt interim remedy trial resulted in substantial additional limitations being imposed on substantial additional limitations being imposed on the SWP and CVP. (“Wanger Interim Remedies”)the SWP and CVP. (“Wanger Interim Remedies”)

– The salmon interim remedy trial resulted in no The salmon interim remedy trial resulted in no additional limitations being imposed on the SWP or additional limitations being imposed on the SWP or CVP.CVP.

Effect of Regulatory / Judicial Effect of Regulatory / Judicial Actions Actions (continued)(continued)

• The Wanger Delta smelt limitations were The Wanger Delta smelt limitations were in effect for about one year and had the in effect for about one year and had the effect of reducing SWP deliveries through effect of reducing SWP deliveries through June 2008 by about 500,000 acre feet.June 2008 by about 500,000 acre feet.

Effect of Regulatory / Judicial Effect of Regulatory / Judicial Actions Actions (continued)(continued)

• The second wave of actions has come in The second wave of actions has come in the form of new biological opinions issued the form of new biological opinions issued by the USFWS on December 15, 2008 by the USFWS on December 15, 2008 regarding the Delta smelt and NMFS on regarding the Delta smelt and NMFS on June 4, 2009 for the salmon, steelhead, June 4, 2009 for the salmon, steelhead, green sturgeon and killer whales.green sturgeon and killer whales.

Effect of Regulatory / Judicial Effect of Regulatory / Judicial Actions Actions (continued)(continued)

– Unlike the prior opinions, both of these Unlike the prior opinions, both of these opinions are “jeopardy” opinions and include opinions are “jeopardy” opinions and include so-called “reasonable and prudent so-called “reasonable and prudent alternatives” (RPAs).alternatives” (RPAs).

– The RPAs add to the Wanger Interim Remedies The RPAs add to the Wanger Interim Remedies and include measures (and include measures (fallfall X-2; extended DCC X-2; extended DCC closures; SJR inflow/project export ratios) closures; SJR inflow/project export ratios) never seen before.never seen before.

• The effect of the two new biological The effect of the two new biological opinions on the SWP and CVP water opinions on the SWP and CVP water deliveries is described in the following deliveries is described in the following table:table:

SWPSWP CVPCVP TOTALTOTAL

20082008 510,000510,000 222,000222,000 732,000732,000

20092009 251,000251,000 190,000190,000 441,000441,000

20102010 750,000750,000 310,000310,000 1,060,001,060,0000

SWP & CVP WATER DELIVERY REDUCTIONS SINCE 2007SWP & CVP WATER DELIVERY REDUCTIONS SINCE 2007(Compared to Operations Under D1641)(Compared to Operations Under D1641)

Effect of Regulatory / Judicial Effect of Regulatory / Judicial Actions Actions (continued)(continued)

• To put these numbers in perspective, 1 To put these numbers in perspective, 1 acre foot is enough water to some 5 to 7 acre foot is enough water to some 5 to 7 people for a year.people for a year.

• Thus, the impact of the two BiOps since Thus, the impact of the two BiOps since their adoption has been to redirect the their adoption has been to redirect the water from 2,200,000 to 7,400,000 people water from 2,200,000 to 7,400,000 people eacheach yearyear to Delta outflows for fishery to Delta outflows for fishery purposes.purposes.

• These numbers have led to the third wave These numbers have led to the third wave of actions regarding the Delta since 2006.of actions regarding the Delta since 2006.

Recent Judicial ActionsRecent Judicial Actions

• Since release of the new Delta smelt Since release of the new Delta smelt Biological Opinion on December 15, 2008, Biological Opinion on December 15, 2008, six actions were filed by water user six actions were filed by water user groups, including the State Water groups, including the State Water Contractors and Metropolitan Water Contractors and Metropolitan Water District and are now pending in the federal District and are now pending in the federal district court in Fresno.district court in Fresno.

• In addition, seven cases were filed In addition, seven cases were filed challenging the June 4, 2009 biological challenging the June 4, 2009 biological opinion issued by NMFS.opinion issued by NMFS.

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• All of the cases in this latest wave challenge All of the cases in this latest wave challenge the two new biological opinions on the the two new biological opinions on the ground that the regulatory agencies failed to ground that the regulatory agencies failed to use the “best available scientific data” in use the “best available scientific data” in violation of Section 7(a)(2) of the ESA. For violation of Section 7(a)(2) of the ESA. For example:example:

• The plaintiffs argue that the FWS erroneously The plaintiffs argue that the FWS erroneously used raw salvage numbers in evaluating the used raw salvage numbers in evaluating the impacts of the projects on delta smelt.impacts of the projects on delta smelt.

– Raw salvage says nothing about population Raw salvage says nothing about population level impacts and should have been level impacts and should have been normalized through the use of a cumulative normalized through the use of a cumulative salvage index and a life cycle model of salvage index and a life cycle model of population abundance.population abundance.

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• Plaintiffs also allege that NMFS erred by Plaintiffs also allege that NMFS erred by imposing a 4:1 ratio on San Joaquin River flows imposing a 4:1 ratio on San Joaquin River flows and exports in the spring months.and exports in the spring months.

– While some scientific studies have found a While some scientific studies have found a relationship between entrainment of relationship between entrainment of juvenile salmon and San Joaquin juvenile salmon and San Joaquin flowsflows, no , no science exists that says science exists that says exportsexports and and entrainment are related.entrainment are related.

• Further, plaintiffs challenge NMFS “calendar Further, plaintiffs challenge NMFS “calendar based” imposition of OMR flow limits on based” imposition of OMR flow limits on January 1 again because they are based on an January 1 again because they are based on an evaluation of raw salvage evaluation of raw salvage andand because they because they are applied regardless of whether juvenile are applied regardless of whether juvenile salmon are being entrained – or are even salmon are being entrained – or are even migrating.migrating.

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• In addition to the “best science” In addition to the “best science” arguments, the BiOps are also being arguments, the BiOps are also being contested on grounds that are not typical contested on grounds that are not typical of ESA challenges.of ESA challenges.

• The cases contend the adoption and The cases contend the adoption and implementation of the biological opinions are implementation of the biological opinions are “major federal actions” within the meaning of “major federal actions” within the meaning of NEPANEPA, that will adversely affect the human , that will adversely affect the human environment, and the massive shift of water environment, and the massive shift of water away from human consumptive user should away from human consumptive user should have been analyzed in an EIS.have been analyzed in an EIS.

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• Further, because both BiOps reach “jeopardy” Further, because both BiOps reach “jeopardy” conclusions about the continued operations of the conclusions about the continued operations of the CVP/SWP, they include “Reasonable and Prudent CVP/SWP, they include “Reasonable and Prudent Alternatives” (RPAs) that effectively re-operate the Alternatives” (RPAs) that effectively re-operate the Projects to meet the needs of fish, with humans Projects to meet the needs of fish, with humans receiving the leftovers.receiving the leftovers.

• The ESA also requires, though, that for an RPA to be The ESA also requires, though, that for an RPA to be valid, it must be:valid, it must be:

(1)(1) economically and technologically feasible;economically and technologically feasible;

(2)(2) consistent with the intended purpose of the consistent with the intended purpose of the Project; andProject; and

(3)(3) It must be within the scope of the action agency’s It must be within the scope of the action agency’s jurisdiction to implement. 16 U.S.C. §7150 CFR jurisdiction to implement. 16 U.S.C. §7150 CFR §402.02§402.02

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• The FWS BiOp pays no attention to these The FWS BiOp pays no attention to these factors and the record shows no attempt to factors and the record shows no attempt to evaluate them while the BiOp was being evaluate them while the BiOp was being developed.developed.

• The NMFS Salmon BiOp shows a half-hearted The NMFS Salmon BiOp shows a half-hearted attempt to look at some of the factors, but the attempt to look at some of the factors, but the plaintiffs consider it to be inadequate.plaintiffs consider it to be inadequate.

Recent Judicial OpinionsRecent Judicial Opinions

• The federal court has now issued major The federal court has now issued major opinions dealing with preliminary injunction opinions dealing with preliminary injunction and summary judgment motions brought by and summary judgment motions brought by plaintiffs to lift the limitations restricting plaintiffs to lift the limitations restricting SWP / CVP pumping.SWP / CVP pumping.

• The Court’s most recent opinion (12/14/10) The Court’s most recent opinion (12/14/10) grants summary judgment overturning the grants summary judgment overturning the smelt BiOp and remanding the opinion to the smelt BiOp and remanding the opinion to the FWS. In its opinions, in addition to granting a FWS. In its opinions, in addition to granting a preliminary injunction and summary preliminary injunction and summary judgment, the court broadly agrees with judgment, the court broadly agrees with many of the “best science” claims brought by many of the “best science” claims brought by plaintiffs:plaintiffs:

Recent Judicial OpinionsRecent Judicial Opinions

(continued)(continued)

– In issuing a Preliminary Injunction in the In issuing a Preliminary Injunction in the Salmon cases, the Court finds NMFS’ failure to Salmon cases, the Court finds NMFS’ failure to normalize raw salvage numbers in developing normalize raw salvage numbers in developing export limitations to be a “fundamental and export limitations to be a “fundamental and inexplicable error.”inexplicable error.”

– In the Salmon cases, the Court also finds that In the Salmon cases, the Court also finds that restrictions on SWP Delta pumping (including restrictions on SWP Delta pumping (including the 4:1 SJR inflow / export limitation) were “not the 4:1 SJR inflow / export limitation) were “not based on the best available scientific data.”based on the best available scientific data.”

Recent Judicial ActionsRecent Judicial Actions• In the In the smeltsmelt cases, the Court indicates the FWS’ cases, the Court indicates the FWS’

failure to normalize salvage data for population failure to normalize salvage data for population abundance – despite repeated warnings by DWR, abundance – despite repeated warnings by DWR, the SWC and FWS’ own peer reviews to do so – the SWC and FWS’ own peer reviews to do so – “raises the spectre of bad faith.”“raises the spectre of bad faith.”

– And, in granting summary judgment against the delta And, in granting summary judgment against the delta smelt BiOp, the Court concludes that the FWS used smelt BiOp, the Court concludes that the FWS used “sloppy science” and developed “uni-directional “sloppy science” and developed “uni-directional prescriptions.” prescriptions.”

• It also concludes that the FWS’ decision to use It also concludes that the FWS’ decision to use raw salvage numbers is “arbitrary, capricious, raw salvage numbers is “arbitrary, capricious, and represents a failure to utilize the best and represents a failure to utilize the best available science in light of universal recognition available science in light of universal recognition that salvage data must be normalized.” that salvage data must be normalized.”

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• In the same summary judgment decision, In the same summary judgment decision, the Court determines that FWS’ conclusion the Court determines that FWS’ conclusion that the projects have negatively that the projects have negatively influenced the availability of Fall habitat influenced the availability of Fall habitat (X2) is “fundamentally flawed.”(X2) is “fundamentally flawed.”

• This conclusion is important because the This conclusion is important because the BiOp’s Fall X2 measure is BiOp’s Fall X2 measure is veryvery water water consumptive (about 1 MAF each time it is consumptive (about 1 MAF each time it is triggered).triggered).

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• Importantly, the Court has also heavily Importantly, the Court has also heavily criticizes the FWS for failing to fairly and criticizes the FWS for failing to fairly and honestly evaluate the honestly evaluate the humanhuman impactsimpacts of of its decisions.its decisions.

– In its preliminary rulings, the Court found it be In its preliminary rulings, the Court found it be “inequitable to put the entire burden of [other] “inequitable to put the entire burden of [other] stressors on the water supply.stressors on the water supply.

– The Court also found that the cases presented The Court also found that the cases presented matters of “first impression” involving the matters of “first impression” involving the “intersection of harm to threatened species “intersection of harm to threatened species and humans and their environment.”and humans and their environment.”

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• Then, in its December 2010 Decision granting Then, in its December 2010 Decision granting summary judgment against the FWS, the Court says summary judgment against the FWS, the Court says the following:the following:

– ““The RPA actions manifestly interdict the water supply for The RPA actions manifestly interdict the water supply for domestic human consumption and agricultural use for domestic human consumption and agricultural use for over 20 million people who depend on the Projects for over 20 million people who depend on the Projects for their water supply. “Trust us” is not acceptable. The FWS their water supply. “Trust us” is not acceptable. The FWS has shown no inclination to fully and honestly address has shown no inclination to fully and honestly address water supply needs beyond the species, despite the fact water supply needs beyond the species, despite the fact that its own regulation requires such consideration.that its own regulation requires such consideration.

How the appropriation of water for the RPA actions, to the How the appropriation of water for the RPA actions, to the exclusion implementing less harmful alternatives is exclusion implementing less harmful alternatives is required for species ‘survival’ is not explained. The required for species ‘survival’ is not explained. The appropriate remedy for such failure to explain is remand appropriate remedy for such failure to explain is remand to the agency.”to the agency.”

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• Notably, the Court has Notably, the Court has alsoalso sided with the sided with the plaintiffs in ruling that the Bureau of plaintiffs in ruling that the Bureau of Reclamation’s Reclamation’s agreement to implementagreement to implement the BiOps is “major federal action” that the BiOps is “major federal action” that triggers NEPA. triggers NEPA.

• By failing to undertake By failing to undertake anyany NEPA NEPA compliance prior to its decision to compliance prior to its decision to implement the BiOps, Reclamation implement the BiOps, Reclamation violated the statute. violated the statute. Consolidated Delta Consolidated Delta Smelt CasesSmelt Cases, 2009 U.S. District Lexis , 2009 U.S. District Lexis 105951; see also 105951; see also Consolidated Salmon Consolidated Salmon CasesCases, 2010 U.S. District Lexis 9897 *18., 2010 U.S. District Lexis 9897 *18.

Recent Judicial ActionsRecent Judicial Actions (continued)(continued)

• In short, while the Plaintiffs did not prevail on In short, while the Plaintiffs did not prevail on all of their claims, the Court has made it all of their claims, the Court has made it abundantly clear that, with water in California abundantly clear that, with water in California as scarce as it now is, the days are long past as scarce as it now is, the days are long past when any federal agency – regulatory or not – when any federal agency – regulatory or not – can use bogus science to support its actioncan use bogus science to support its action

– It has also left no doubt that the days are It has also left no doubt that the days are over when a federal regulatory agency can over when a federal regulatory agency can take a water-related action without regard take a water-related action without regard to the human consequences.to the human consequences.

Remaining Judicial Remaining Judicial ProceedingsProceedings• Cross-motions for summary judgment Cross-motions for summary judgment

regarding the salmonid BiOp were argued regarding the salmonid BiOp were argued on December 16 and 17, 2010 and are on December 16 and 17, 2010 and are awaiting decision.awaiting decision.

• The federal defendants are The federal defendants are veryvery unhappy unhappy with the judgment in the smelt cases and with the judgment in the smelt cases and are seeking to amend it.are seeking to amend it.

• The environmental defendants/intervenors The environmental defendants/intervenors have already filed an appeal of the smelt have already filed an appeal of the smelt cases with the Ninth Circuit.cases with the Ninth Circuit.