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Nothing Great Comes Easily: The Successful Struggle to Secure the City of Bend's New Water Supply Project

September 18, 2017

Fresh from intense litigation over the spotted frog[1], Central Oregon has again been the arena of another fierce fight, this time involving the future of the City of Bend's water supply improvement project. The legal trajectory of this court challenge was determined not by the ESA but by NEPA-related theories. The case holds our interest for how such challenges may be framed in the future, as municipal and other consumptive needs continue to compete for water with those seeking additional resources for aquatic habitats.

You might have missed the terse memorandum decision from the Ninth Circuit Court of Appeals affirming Judge Aiken’s opinion in Central Oregon Landwatch v. Connaughton.[2] That opinion allowed the City of Bend, Oregon to improve its water supply infrastructure with an upgraded creek diversion facility and a 10-mile long replacement pipe through Forest Service land. But the brevity of the opinion belied the duration and intensity of the underlying fight. The opinion followed years of litigation where several public interest groups threw everything they had at the city to prevent the project from going forward. It is an example, in our current era, of what cities and other water-using entities have to plan for whenever they contemplate a project involving federal lands, even in the absence of a threatened or endangered species.

In this case, the City sought a new Forest Service special use permit (SUP) for its project. In response, plaintiffs alleged that the project and process violated the National Environmental Policy Act (NEPA), the Clean Water Act (CWA), the Federal Land Policy and Management Act (FLPMA), and the National Forest Management Act (NFMA).[3] Violations of the latter two acts were alleged to occur by virtue of the proposed project's incompatibility with the Forest Service's Inland Native Fish Strategy (INFISH) guidelines and with the Deschutes National Forest Plan (DNFP). Plaintiffs asserted that temperature-based Riparian Management Objectives (RMOs) established by INFISH would not be met. These allegations were first made at the administrative level then in the United States District Court, which ruled in the City’s favor on all allegations.[4]

It is noteworthy what was not alleged. The creek does not have threatened or endangered species.[5] There is no allegation of violation of the Endangered Species Act. The citizen suit provision of that Act is the more traditional litigation angle for environmental lawsuits in this region.

Among the plethora of allegations in the 283 paragraph complaint, two were particularly noteworthy assertions: first, that the Forest Service should have considered no withdrawal of water at all as part of its No Action alternative under NEPA. In other words, the No action Alternative, in plaintiffs’ view, meant the restoration of Creek to its original state and presumably cessation of all water deliveries to the City of Bend from Tumalo Creek. Second, that the Forest Service was under a legal obligation to impose minimum instream flow requirements in its authorization of the SUP, in order to protect fish and aquatic habitats. Plaintiffs were here suggesting that the Forest Service employ federal authority to impose flows that conflict with state water rights.

The case represents another effort to push the boundaries of NEPA and other laws outward in creative ways to encompass virtually any activity that could affect the use of water, even if the project in question entails what, in another day, might have been regarded as a routine infrastructure upgrade.

Brief background

The City of Bend has since 1926 diverted water from Tumalo Creek, a tributary of the Deschutes River. This water is conveyed to Bridge Creek. A structure on Bridge Creek then diverts the water from Bridge Creek through pipelines to the City. The existing conveyance system to the City consists of two deteriorating pipelines at risk of failure. Under the City’s plans the diversion structure would be upgraded and a new pipeline would replace the two old pipes, and diversions would be limited to 18.2 cubic feet per second.[6] NEPA was implicated because the diversion facility and replacement pipe would be on federal land, and would require a Forest Service SUP.. NEPA requires agencies to prepare an Environmental Impact Statement (EIS) for any “major Federal actions significantly affecting the quality of the human environment.”[7] But an EIS is not required in all cases – the agency first must prepare an Environmental Assessment (EA) to see whether an action will be significant. In this case, the Forest Service EA determined that there would be no significant impact,[8] hence no EIS was required.

Essentially, plaintiffs contended that the Forest Service didn’t take a hard enough look at the environmental consequences of the proposed alternatives before accepting the EA in lieu of an EIS. But, as the three-judge panel of the Ninth Circuit pointed out, the EA needed only be a “reasonably thorough discussion” of significant impacts of the probable environmental consequences.[9] This EA fit that bill, according to the court. The District Court granted summary judgment to the Forest Service, finding that the Service's actions were not arbitrary and capricious, and the Ninth Circuit affirmed.

Imposition of mandatory instream flows

A key component of plaintiffs’ flow concerns was that, (i) limiting City withdrawals to 18.2 cfs was insufficient to protect fish habitat; and (ii) the City might someday divert more than 18.2 cfs of water. Plaintiffs asserted that such an excess diversion might occur was a reasonably foreseeable impact that should have been analyzed.[10] But the court thought that the fear of future increased diversions was “speculative.” If the City were to divert more than 18.2 cfs, it would have to come back to the Forest Service to modify the SUP and that action would be once again subject to challenge.[11] These concerns were coupled with a far weightier allegation that the Forest Service had an obligation to impose minimum flows as a condition to issuing its SUP for the project, in effect "reprioritizing" and subordinating existing water rights:

The Forest Service must identify and legally establish minimum flows necessary to preserve fish habitat on Tumalo Creek and demonstrate that the approval is based on having given a preference to riparian area dependent resources, including fish, over the proposed special use.[12]

Interestingly, the Oregon Water Resources Department (OWRD), the agency which manages water resources in the state of Oregon, filed a forceful amicus brief to the Ninth Circuit stating that the evidence showed that the creek did not need more water for fish. More importantly, OWRD argued that, for the Forest Service to do as the plaintiffs requested would upend traditional prior appropriation water rights, effectively “reapportioning” water rights between the city, Tumalo Irrigation District (a large downstream user), and instream water rights.[13]

OWRD also incorporated the District Court's analysis of the conditions under which the Forest Service could or should impose flows to protect species:

[A]lthough there is Ninth Circuit precedent that supports the Forest Service's authority to restrict the use of rights-of-way to maintain minimum stream flows, it is not clear that such authority extends to the present situation. In County of Okanogan v. National Marine Fisheries Service, 347 F.3d 1081 (2003), this court held that the Forest Service could restrict the use of rights-of-way to protect endangered fish despite the permit applicant being entitled to take more water from the stream under state law. … But in that case, the National Marine Fisheries Service had concluded that the permit applicant's diversion was likely to jeopardize the continued existence of endangered steelhead and spring chinook salmon. … Here, there are no endangered species in Tumalo Creek and the record shows that there will be no demonstrable benefit to fish from restricting the City's diversion to less than 18.2 cfs.[14]

The Ninth Circuit agreed that the Forest Service was not required to impose minimum instream flow requirements in authorizing the SUP. Indeed, the court held that the project would have a positive impact on stream flows.[15]

The legal effect of certain Forest Service regulatory standards and guidelines

Many of plaintiff's claims concerned the project's alleged violation of standards, guidelines, and goals under the authorities noted above. Plaintiffs asserted that project impacts on such goals and guidelines should have been thoroughly analyzed in the EA. For example, plaintiff cited the "standards, guidelines and objectives" set forth in the Deschutes National Forest Plan which pertain to aquatic ecosystems and water quality.[16] The goal to "restore and maintain the ecological health of watersheds and aquatic ecosystems contained within them on public lands" is contained in NWFP's Aquatic Conservation Strategy.[17] The Deschutes Land and Resource Management Plan (DLRMP) established "standards and guidelines" for Forest Service actions and authorizations, including issuance of SUPs.[18] INFISH's standards and guidelines urge the Forest Service to "avoid effects that would retard or prevent attainment of the Riparian Management Objectives and avoid adverse effects on inland native fish."[19] They also establish temperature and water quality objectives.[20] The EA was deficient, according to plaintiffs, in failing to disclose project impacts on these and other "planning standards, guidelines and objectives."[21] Plaintiffs alleged that these were binding commitments on the Forest Service, requiring it to impose minimum instream flow requirements on the creek prior to issuing the City's SUP.[22]

Yet, for all this, the range of actual specific actions that the Forest Service was required to take in evaluating environmental impacts of the project was a much smaller set than plaintiffs had alleged. Indeed, the District Court found "only 5 of the 15 planning directives plaintiffs cite are site-specific provisions subject to judicial review."[23] None of these mandated that the Forest Service set minimum instream flow requirements. To take one example, the District Court said,

[T]he Deschutes LRMP RP–9 regulation requires the Forest Service to “[p]rotect instream flow on National Forest System Lands.” Plaintiffs, however, interpret this provision to mean the agency had a duty to establish minimum streamflow levels before issuing the SUP. While the Forest Service had a duty to protect the Creek's instream flows, it was not required to adopt plaintiffs' specific recommendations on how to do so. … Accordingly, plaintiffs' argument that the Forest Service had a duty to establish minimum instream flow requirements is without merit.[24]

On appeal, the Ninth Circuit agreed, according substantial deference to the Forest Service's own interpretation of these regulations as non-binding guidelines.[25]

The No Action alternative

Plaintiffs' also alleged that the No Action alternative in the EA was misplaced. The plaintiffs essentially argued for a "without project" baseline scenario as if it were an ESA consultation case. Plaintiffs alleged that the No Action alternative under NEPA should be the "expiration of the current Special Use Permit and the restoration of natural (or native) flows in Tumalo Creek benefiting the watershed and fisheries."[26] They also contended that the EA failed to consider an action alternative that would "limit diversion to what would be necessary to maintain minimum flows" in the creek, or to fully analyze other project options.[27]

The District Court confirmed that an agency is not required to consider alternatives that are not feasible in light of a proposed action's purpose or need.[28] And "no action" equates to status quo, not pre-project conditions:

Plaintiffs allege that the Forest Service incorrectly presumed the no action baseline was the City's continued diversion of 18.2 cfs because the City's current SUP will expire in less than five years. They assert that the appropriate no action alternative was the discontinuation of the current water system. However, the Forest Service explained that “the no action alternative is best represented by current conditions, including the City's current system that has been in place now for decades, not the environmental conditions that may have been in existence prior to the beginning of diversions in the 1920s.” [Citation omitted]. Further, there is no reason to presume that when the City's current SUP expires, the Forest Service would not renew it as it has in years past.[29]

The appellate court held that Forest Service did not act arbitrarily and capriciously by defining its "no action" alternative as a continuation of the existing SUP, as doing so is permitted by its own regulations and existing precedent.[30]

The adequacy of qualitative climate change analysis

Plaintiffs contended that the Forest Service streamflow data was incomplete and its climate-change assessment was purely qualitative.[31] They alleged that the Service ignored "readily available quantitative assessment tools and methods to analyze the issue."[32]

Both the District Court and the Ninth Circuit held that the Forest Service was not required to conduct a quantitative climate analysis. Because the impacts of climate change would be about the same on stream flows under either NEPA alternative, only a brief discussion of climate change's impact on the project area was necessary.[33] Agencies may describe environmental impacts in qualitative terms "when they explain their reasons for doing so and 'why objective data cannot be provided.'"[34] Here the court accepted the Forest Service's explanation why it did not dig any deeper than it did on this issue.

Concluding Comment

The Oregon District Court and the Ninth Circuit judges may have been scratching their heads as to exactly why this case was brought. Under one component of its forest plan the Forest Service sets aside about 4,136 acres as managed watershed specifically for the City of Bend's municipal water supply.[35] One of the Service’s primary goals in issuing an SUP is "(1) to provide water at a level of quantity and quality that will, with adequate treatment, result in a satisfactory and safe domestic water supply and (2) to balance the present and future resource use with domestic water supply needs."[36]

Given the principle of substantial deference to an agency’s interpretation of its own rules, perhaps the outcome was quite predictable. Even apart from that deference, however, if one focuses just on one key, undisputed fact, one may see how plaintiffs' case may have been fatally undercut. The old existing pipelines from the creek had no flow control so that even when municipal demand almost always fell well short of needing 18.2 cfs of water, the full amount would still be withdrawn from the creek 24/7, year-round for about 10 miles until the excess water was returned to the creek.[37] The new project’s controls would avoid this needless depletion of creek water, to the clear benefit of aquatic resources in the upper reach of the creek. The proposal was in fact expected to increase the abundance of fish populations there, and to have a neutral or beneficial effect for redband trout habitat.[38] Both courts stressed these water quality benefits of the project. On top of this, there appeared to be little or no supporting legal precedent for plaintiffs’ other main arguments, such as, for example, the idea that No Action under NEPA meant a return to a pristine, pre-project condition.

For more information, please contact Douglas MacDougal or any of the other attorneys in the Firm’s Water Resources, Water Quality, or Permitting and Environmental Review practice groups.

[1] The Center for Biological Diversity WaterWatch of Oregon sued the Bureau of Reclamation and various central Oregon irrigation districts in the United States District Court for the District of Oregon late 2015 and early 2016, claiming failure to consult on the operation of three central Oregon reservoirs—Crane Prairie, Crescent, and Wickiup, and harm to the Oregon spotted frog, a species listed as threatened under the ESA. Plaintiffs sought injunctive relief including immediate changes to reservoir operations. After denial of the requested preliminary relief, the parties eventually reached a settlement agreement.

[2] 2017 WL 3616386 (August 23, 2017) [hereinafter cited as Landwatch Appeal]. Appellants were Central Oregon Landwatch and WaterWatch of Oregon. Appellees were Kent Connaughton in his official capacity as Regional Forester of Region 6, John Allen, in his official capacity as Forest Supervisor of the Deschutes National Forest, and the United States Forest Service. The City of Bend was an Intervenor-Defendant-Appellee.

[3] National Environmental Policy Act, 42 U.S.C. §§ 4321-4361; the National Forest Management Act; 16 U.S.C. §§ 1600 et seq.; the Clean Water Act, 33 U.S.C. § 1251 et seq.; the Federal Land Policy Management Act of 1976, 43 U.S.C. § 1761 et seq. Plaintiffs also asserted violations of the Administrative Procedure Act (APA), 5 U.S.C. § 551 et seq. A summary of the Landwatch allegations is contained in the Landwatch Complaint, paragraph 5:

“Defendants have failed to meet their procedural and substantive duties required by federal environmental law, including by: (1) failing to adequately disclose and assess baseline data related to the diversion and use of water from Tumalo Creek; (2) failing to disclose and assess baseline data on stream temperature and flow volume in Tumalo Creek; (3) failing to adequately disclose the direct, indirect and cumulative impacts of past, present and reasonably foreseeable future actions that will result from Project; (4) violating the CWA and related state water quality standards that limit increases in stream temperature; (5) violating the Inland Native Fish Strategy (“INFISH”) by failing to protect aquatic habitat; (6) failing to assess and determine minimum flows to protect the fisheries in Tumalo Creek and to set conditions to ensure that any diversion and use does not degrade the aquatic system; (7) failing to ensure compliance with state law related to the diversion, use and measurement of water taken from Tumalo and Bridge Creeks and other violations as set forth herein; (8) failing to prepare an Environmental Impact Statement and adequately disclose, analyze and consider the impacts of selecting the No Action alternative and compare and analyze reasonable action alternatives.”

[4] Central Oregon Landwatch v. Connaughton, 2014 WL 6893695 (Dec. 5, 2014). [Hereinafter cited as Landwatch.]

[5] Landwatch at 8. Plaintiffs did contend that redband trout are a sensitive species on some lists, that bull trout historically used Tumalo creek, and that the Forest Service has "proposed consideration of the reintroduction of bull trout" to the creek. Landwatch Complaint,pars. 227-232. Plaintiffs asserted that the project would decrease or foreclose the chance of successful bull trout reintroduction. Id at 232.

[6] The original project proposal was not so limited. In September 2012, the Forest Service approved issuance of an SUP for a greater rate of water withdrawal. Plaintiffs challenged the EA for that project, and successfully enjoined it. Central Oregon Landwatch v. Connaughton, 905 F. Supp. 2d 1192 (D. Or. 2012). The revised project proposal limited water withdrawals to 18.2 cfs.

[7] 42 U.S.C. §4332(2)(C).

[8] Such a finding, that an EIS is not required, is called a Finding of No Significant Impact (FONSI), and must explain why a project impacts are insignificant. The FONSI must be "accompanied by a convincing statement of reasons to explain why a project’s impacts are insignificant…" Landwatch Appeal at2.

[9] Landwatch Appeal at2-3.

[10] See generally, Landwatch Complaint, Sixth Claim for Relief.

[11] Landwatch at 3. Plaintiffs’ concern that the City’s future withdrawals would exceed 18.2 cfs may have been motivated in part by the project's infrastructure capacity, the City's cumulative water rights, and the City’s public representations: “The project's 30-inch pipeline has the physical capacity to deliver 36 cfs to 47 cfs from the Bridge Creek intake facility to the City of Bend's distribution facilities known as the Outback Site,” and that “the project's lifespan is 75-100 years.” Landwatch Complaint, paragraphs 25 & 26. Plaintiffs also contended: “The City of Bend claims water rights under Oregon state law to divert up to 36 cfs of water from Tumalo Creek, subject to applicable laws.” “The City's Water Management and Conservation Plan (WMCP) states that ‘[b]ased on projected water demand growth, the City anticipates fully exercising all of its existing surface water and ground water rights during the next 20-year planning period.’” Landwatch Complaint, paragraphs 32 & 33.

[12] Landwatch Complaint par. 176.

[13] “[S]uch a condition on the SUP would not only impact the City's water rights, it would effectively reapportion water rights as between the City, TID, and the instream rights in contravention of Oregon's system of prior appropriation. That is so because TID would be able to use water allocated to the City. When there is insufficient flow to meet demand, Oregon law requires water to be distributed according to priority date. Ore. Rev. Stat. § 540.045. Ordinarily, the watermaster would make sure that water is apportioned to the City, TID, and the in-stream water rights according to the relative priority dates of those rights. If the City is required to bypass water to which it is entitled under state law, TID - whose diversion is not controlled by the Forest Service - would be able to divert the water allocated to the city.” OWRD Brief at 8.

[14] OWRD Brief at 8-9.

[15] Landwatch Appeal at1.

[16] Landwatch Complaint par. 45.

[17] Id.

[18] Landwatch Complaint par. 92.

[19] Landwatch Complaint par. 47.

[20] Landwatch Complaint pars. 98-100.

[21] Landwatch Complaint par. 48.

[22] Landwatch at7.

[23] Id.

[24] Landwatch at7. The court cited Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55 (2004) in support of this position, noting that "environmental regulation may be “mandatory as to the object to be achieved,” but it allows agency discretion in deciding how to achieve it. Hence, the Forest Service is entitled to substantial deference in the interpretation of its own forest plan. Landwatch at7, citing Native Ecosys. Council v. Weldon, 697 F.3d 1043, 1056 (9th Cir.2012).

[25] Landwatch Appeal at1. For example RMO's are regarded as benchmarks against which to measure progress toward ultimate goals. Id.

[26] Landwatch Complaint par. 238.

[27] Id. at pars 239-241.

[28] Landwatch at4.

[29] Id. at 4.

[30] Landwatch Appeal at2.

[31] See generally Landwatch Complaint pars. 50-55.

[32] Landwatch Complaint par. 54.

[33] Landwatch Appeal at3.

[34] Id., citing League of Wilderness Defs.-Blue Mountains Biodiversity Project v. U.S. Forest Serv., 689 F.3d 1060, 1076 (9th Cir. 2012).

[35] Appellate Brief for the Federal Appellees, at 32.

[36] Id.

[37] See Appellate Brief for the Federal Appellees, at 9 and 12.

[38] Id. at 36-37.

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