United States of America
Butte Environmental Council sued the Army Corps of Engineers, the Fish and Wildlife Service, and the City of Redding over their decisions to permit a proposed business park in Redding that would destroy 234.5 acres of critical habitat along Stillwater Creek in Redding. Specifically, the Council challenged the Corps decision under the Administrative Procedure Act to issue a Clean Water Act section 404 permit for the project and the FWSs biological opinion that the project would not adversely modify critical habitat for endangered and threatened species. The Ninth Circuit, like the district court, upheld the FWSs determination that the project would not result in the “adverse modification” of critical habitat. The Court first rejected the Councils argument that the FWS applied an improper definition of “adverse modification” and thus failed to account for “recovery needs” of the affected species as required by Gifford Pinchot Task Force v. U.S. Fish & Wildlife Service (9th Cir. 2004) 378 F.3d 1059.). In rejecting the Councils argument, the Court pointed to the FWSs statement in the biological opinion that it did not rely on the flawed definition of “adverse modification” of critical habitat set out in 50 C.F.R. 402.02, but instead, relied upon the statute and the decision in Gifford Pinchot for its analysis with respect to critical habitat. In reaching this conclusion, the Court noted that nothing in the biological opinion suggested otherwise. The Court held the FWSs determination that, while critical habitat would be destroyed, no “adverse modification” would occur because only a very small percentage of the total critical habitat for the affected species would be eliminated. The Court also held that the Corps decision to issue a 404 permit for the project was neither arbitrary nor capricious. The Corps properly applied 40 C.F.R. § 230.10(a)(3), the regulation that applies to non-water dependent activities. That regulation states that, where a proposed activity is not water dependent, "practicable alternatives that do not involve special aquatic sites are presumed to be available, unless clearly demonstrated otherwise". The Court held that the Corps applied the proper presumption and found that it was rebutted under the appropriate standard. The Corps had determined that the project was not water dependent, but that, based on a review of over a dozen alternative sites, the City had clearly demonstrated that there are no practicable alternative sites available. The Court rejected the Councils argument that the Corps decision to issue the permit was inconsistent with its earlier criticisms of the project in an Environmental Impact Statement. Evidence in the record demonstrate that the City modified the project to address the Corps early criticisms. The Court rejected the Councils claim that the Corps “simply deferred” to the Citys judgment rather than making an independent determination of the business parks purpose. The Court disagreed, pointing out that the Corps initial project criticisms, which resulted in project changes. Only after the City modified the project did the Corps agree with the Citys point of view. Noting that the Corps has a duty to consider an applicants purposes when they are “genuine and legitimate,” the Court found the Corps action to be reasonable on this point.