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Drakes Bay Oyster Co. v. Jewell

United States Court of Appeals, Ninth Circuit

September 3, 2013

Drakes Bay Oyster Company; Kevin Lunny, Plaintiffs-Appellants,
Sally Jewell, in her official capacity as Secretary, U.S. Department of the Interior; U.S. Department of the Interior; U.S. National Park Service; Jonathan B. Jarvis, in his official capacity as Director, U.S. National Park Service, Defendants-Appellees.

Argued and Submitted May 14, 2013—San Francisco, California

Appeal from the United States District Court for the Northern District of California Yvonne Gonzalez Rogers, District Judge, Presiding D.C. No. 4:12-cv-06134-YGR

Amber D. Abbasi (argued), Cause of Action, Washington, D.C.; John Briscoe, Lawrence S. Bazel, and Peter S. Prows, Briscoe Ivester & Bazel LLP, San Francisco, California; S. Wayne Rosenbaum and Ryan Waterman, Stoel Rives LLP, San Diego, California; Zachary Walton, SSL Law Firm LLP, San Francisco, California, for Plaintiffs-Appellants.

J. David Gunter II (argued) Trial Attorney, United States Department of Justice, Washington, D.C.; Ignacia S. Moreno, Assistant Attorney General, Stephen M. Macfarlane, Joseph T. Mathews, E. Barrett Atwood, and Charles Shockey, Trial Attorneys, United States Department of Justice, Sacramento, California, for Defendants-Appellees.

Judith L. Teichman, San Francisco, California, for Amici Curiae Alice Waters, Tomales Bay Oyster Company, Hayes Street Grill, Marin County Agricultural Commissioner, Stacy Carlsen, the California Farm Bureau Federation, the Marin County Farm Bureau, the Sonoma County Farm Bureau, Food Democracy Now, Marin Organic, and the Alliance For Local Sustainable Agriculture.

Trent W. Orr and George M. Torgun, Earthjustice, San Francisco, California, for Amici Curiae Environmental Action Committee of West Marin, National Parks Conservation Association, Natural Resources Defense Council, Save Our Seashore, and the Coalition of National Park Service Retirees.

Before: M. Margaret McKeown and Paul J. Watford, Circuit Judges, and Algenon L. Marbley, District Judge.[*]


Environmental Law / Preliminary Injunction

The panel affirmed the district court's order denying a preliminary injunction challenging the Secretary of the Interior's discretionary decision to let Drakes Bay Oyster Company's permit for commercial oyster farming at Point Reyes National Seashore expire on its own terms.

Drakes Bay sought a preliminary injunction, arguing that the Secretary's decision to let the permit expire violated the authorization in the Department of the Interior Appropriations Act ("Section 124"), the National Environmental Policy Act, and various federal regulations. The panel held that it had jurisdiction to review whether the Secretary violated any legal mandate contained in Section 124 or elsewhere, but that it lacked jurisdiction to review the Secretary's ultimate discretionary decision whether to issue a new permit. The panel held that Drakes Bay was not likely to succeed in proving that the Secretary violated constitutional, statutory, regulatory, or other legal mandates or restrictions. The panel further held that Drakes Bay was not entitled to a preliminary injunction not only because it failed to raise a serious question about the Secretary's decision, but also because it had not shown that the balance of equities weighed in its favor.

Judge Watford dissented because he would hold that Drakes Bay was likely to prevail on its claim that the Secretary's decision was arbitrary, capricious, or otherwise not in accordance with law. Judge Watford would hold that injunctive relief preserving the status quo should have been granted.


McKEOWN, Circuit Judge:

This appeal, which pits an oyster farm, oyster lovers and well-known "foodies" against environmentalists aligned with the federal government, has generated considerable attention in the San Francisco Bay area.[1] Drakes Bay Oyster Company ("Drakes Bay") challenges the Secretary of the Interior's discretionary decision to let Drakes Bay's permit for commercial oyster farming expire according to its terms. The permit, which allowed farming within Point Reyes National Seashore, was set to lapse in November 2012. Drakes Bay requested an extension pursuant to a Congressional enactment that provided, in relevant part, "notwithstanding any other provision of law, the Secretary of the Interior is authorized to issue a special use permit with the same terms and conditions as the existing authorization." Department of the Interior Appropriations Act, Pub. L. No. 111-88, § 124, 123 Stat. 2904, 2932 (2009) ("Section 124"). After the Secretary declined to extend the permit, Drakes Bay sought a preliminary injunction, arguing that the Secretary's decision violated the authorization in Section 124, the National Environmental Policy Act ("NEPA"), 42 U.S.C. § 4321 et seq., and various federal regulations.

We have jurisdiction to consider whether the Secretary violated "constitutional, statutory, regulatory or other legal mandates or restrictions, " Ness Inv. Corp. v. U.S. Dep't of Agr., Forest Serv., 512 F.2d 706, 715 (9th Cir. 1975), and we agree with the district court that Drakes Bay is not likely to succeed in proving any such violations here. Through Section 124, Congress authorized, but did not require, the Secretary to extend the permit. Congress left the decision to grant or deny an extension to the Secretary's discretion, without imposing any mandatory considerations. The Secretary clearly understood he was authorized to issue the permit; he did not misinterpret the scope of his discretion under Section 124. In an effort to inform his decision, the Secretary undertook a NEPA review, although he believed he was not obligated to do so. Nonetheless, any asserted errors in the NEPA review were harmless.

Because Congress committed the substance of the Secretary's decision to his discretion, we cannot review "the making of an informed judgment by the agency." Id. In letting the permit lapse, the Secretary emphasized the importance of the long-term environmental impact of the decision on Drakes Estero, which is located in an area designated as potential wilderness. He also underscored that, when Drakes Bay purchased the property in 2005, it did so with eyes wide open to the fact that the permit acquired from its predecessor owner was set to expire just seven years later, in 2012. Drakes Bay's disagreement with the value judgments made by the Secretary is not a legitimate basis on which to set aside the decision. Once we determine, as we have, that the Secretary did not violate any statutory mandate, it is not our province to intercede in his discretionary decision. We, therefore, affirm the district court's order denying a preliminary injunction.


I. The Point Reyes National Seashore

Congress established the Point Reyes National Seashore ("Point Reyes") in 1962 "in order to save and preserve, for purposes of public recreation, benefit, and inspiration, a portion of the diminishing seashore of the United States that remains undeveloped." Act of Sept. 13, 1962, Pub. L. No. 87-657, 76 Stat. 538, 538. The area is located in Marin County, California, and exhibits exceptional biodiversity. Point Reyes is home to Drakes Estero, a series of estuarial bays.

The enabling legislation for Point Reyes gave the Secretary of the Interior administrative authority over the area and directed him to acquire lands, waters, and other property and interests within the seashore. Id. at § 3(a), 76 Stat. at 539–40. In 1965, the State of California conveyed to the United States "all of the tide and submerged lands or other lands" within Point Reyes, reserving certain minerals rights to itself and reserving the right to fish to Californians. 1965 Cal.Stat. 2604–2605, § 1–3.

In the Point Reyes Wilderness Act of 1976, Congress designated certain areas within the seashore as "wilderness" under the Wilderness Act of 1964. Pub. L. No. 94–544, 90 Stat. 2515. The Wilderness Act "established a National Wilderness Preservation System to be composed of federally owned areas designated by Congress as 'wilderness areas.'" 16 U.S.C. § 1131(a). Such areas are to "be administered for the use and enjoyment of the American people in such manner as will leave them unimpaired for future use and enjoyment as wilderness, and so as to provide for the protection of these areas [and] the preservation of their wilderness character." Id. Accordingly, subject to statutory exceptions and existing private rights, the Act provides that "there shall be no commercial enterprise . . . within any wilderness area." 16 U.S.C. § 1133(c).

The Point Reyes Wilderness Act designated other areas, including Drakes Estero, as "potential wilderness." Pub. L. No. 94–544, 90 Stat. 2515. Congress considered designating Drakes Estero as "wilderness, " but declined to do so. The legislative history reflects that Congress took into account the Department of the Interior's position that commercial oyster farming operations taking place in Drakes Estero, as well as California's reserved rights and special use permits relating to the pastoral zone, rendered the area "inconsistent with wilderness" at the time. H.R. Rep. No. 94-1680, at 5–6 (1976), reprinted in 1976 U.S.C.C.A.N. 5593, 5597. Congress specified in separate legislation that the "potential wilderness additions" in Point Reyes "shall . . . be designated wilderness" by "publication in the Federal Register of a notice by the Secretary of the Interior that all uses thereon prohibited by the Wilderness Act . . . have ceased." Act of Oct. 20, 1976, Pub. L. No. 94-567, § 3, 90 Stat. 2692.

II. Drakes Bay Oyster Company's Operations

Oyster farming has a long history in Drakes Estero, dating to the 1930s. Charles Johnson started the Johnson Oyster Company in Drakes Estero in the 1950s. His oyster farm was in operation on a five-acre parcel of land on the shore of the estero when Congress created the Point Reyes National Seashore. In 1972, Johnson sold his five acres to the United States, electing to retain a forty-year reservation of use and occupancy ("RUO"). The RUO provided that, "[u]pon expiration of the reserved term, a special use permit may be issued for the continued occupancy of the property for the herein described purposes." (Emphasis added.) It added that, "[a]ny permit for continued use will be issued in accordance with National Park Service ["NPS"] regulations in effect at the time the reservation expires." In late 2004, Drakes Bay agreed to purchase the assets of the Johnson Oyster Company. The RUO was transferred along with the purchase. The forty-year RUO ended on November 30, 2012.

When it purchased the farm, Drakes Bay was well aware that the reservation would expire in 2012, and received multiple confirmations of this limitation. The acquisition documents specifically referenced "that certain Reservation of Possession Lease dated 10/12/1972, entered into by Seller and the National Park Service." In January 2005, the National Park Service wrote to Kevin Lunny, an owner of Drakes Bay, highlighting "the issue of the potential wilderness designation." The Park Service told Lunny that it wanted to make sure he was aware of the Interior Department's legal position "[b]efore [he] closed escrow on the purchase" of Johnson's farm. The Park Service accordingly sent Lunny a memorandum from the Department's Solicitor. Notably, the Solicitor disagreed with the proposition previously expressed in the House Report accompanying the Point Reyes Wilderness Act that California's retained fishing and mineral rights were inconsistent with wilderness designation. The Solicitor concluded, "the Park Service is mandated by the Wilderness Act, the Point Reyes Wilderness Act and its Management Policies to convert potential wilderness, i.e. the Johnson Oyster Company tract and the adjoining Estero, to wilderness status as soon as the non conforming use can be eliminated." In March 2005, the Park Service reiterated its guidance regarding the Drakes Bay's purchase of the Johnson property. It specifically informed Lunny, "Regarding the 2012 expiration date and the potential wilderness, based on our legal review, no new permits will be issued after that date."

III. Section 124 and the Secretary's Decision

Several years later, in 2009, Congress addressed the Department of the Interior's authority to issue Drakes Bay a new permit in appropriations legislation. The Senate appropriations committee proposed a provision requiring the Secretary to issue a special use permit for an additional ten years. H.R. 2996, 111th Cong. § 120(a) (as reported in Senate, July 7, 2009) (providing "the Secretary of the Interior shall extend the existing authorization . . .") (emphasis added). The Senate rejected this mandate, and amended the language to provide that the Secretary "is authorized to issue" the permit, rather than required to do so. 155 Cong. Rec. S9769-03, S9773 (daily ed. Sept. 24, 2009).

The law as enacted provides:

Prior to the expiration on November 30, 2012 of the Drakes Bay Oyster Company's Reservation of Use and Occupancy and associated special use permit ("existing authorization") within Drakes Estero at Point Reyes National Seashore, notwithstanding any other provision of law, the Secretary of the Interior is authorized to issue a special use permit with the same terms and conditions as the existing authorization, except as provided herein, for a period of 10 years from November 30, 2012. Provided, That such extended authorization is subject to annual payments to the United States based on the fair market value of the use of the Federal property for the duration of such renewal. The Secretary shall take into consideration recommendations of the National Academy of Sciences ["NAS"] Report pertaining to shellfish mariculture in Point Reyes National Seashore before modifying any terms and conditions of the extended authorization. Nothing in this section shall be construed to have any application to any location other than Point Reyes National Seashore; nor shall anything in this section be cited as precedent for management of any potential wilderness outside the Seashore.

123 Stat. at 2932. The House Conference Report reflected that the final language "provid[ed] the Secretary discretion to issue a special use permit. . . ." 155 Cong. Rec. H11871-06 (daily ed. October 28, 2009) (emphasis added).

The NAS report that Section 124 referenced, "Shellfish Mariculture in Drakes Estero, Point Reyes National Seashore, California, " was prepared in 2009, in light of "the approach of the 2012 expiration date" of the permit, in order "to help clarify the scientific issues raised with regard to the shellfish mariculture activities in Drakes Estero." The report highlighted that there was "limited scientific literature" available and that there was evidence that oyster farming had both negative and positive effects on the environment. The report explained: "The ultimate decision to permit or prohibit shellfish farming in Drakes Estero necessarily requires value judgments and tradeoffs that can be informed, but not resolved, by science."

Drakes Bay sent letters to the Secretary in July 2010 requesting that he exercise his authority under Section 124 to issue a permit extension. Park Service staff met with Lunny soon after to discuss a draft schedule to complete a NEPA process. The Department, through the Park Service, then formally began to prepare an Environmental Impact Statement ("EIS") in an effort "to engage the public and evaluate the effects of continuing the commercial operation within the national seashore" and " to inform the decision of whether a new special use permit should be issued." Drakes Bay Oyster Company Special Use Permit, 75 Fed. Reg. 65, 373 (Oct. 22, 2010).[2]

The Park Service issued a draft EIS ("DEIS") for public comment in September 2011. Drakes Bay submitted comments criticizing much of the draft, along with a data quality complaint.[3] Congress expressed "concerns relating to the validity of the science underlying the DEIS" and therefore "direct[ed] the National Academy of Sciences to assess the data, analysis, and conclusions in the DEIS in order to ensure there is a solid scientific foundation for the Final Environmental Impact Statement expected in mid-2012." H.R. Conf. Rep. No. 112-331, at 1057 (Dec. 15, 2011), reprinted in 2011 U.S.C.C.A.N. 605, 788.

The NAS released its report in August 2012. The report noted several instances where the DEIS "lack[ed] assessment of the level of uncertainty associated with the scientific information on which conclusions were based." But the report concluded that the available research did not admit of certainty:

The scientific literature on Drakes Estero is not extensive and research on the potential impacts of shellfish mariculture on the Estero is even sparser. . . . Consequently, for most of the resource categories the committee found that there is a moderate or high level of uncertainty associated with impact assessments in the DEIS.

The final EIS, issued on November 20, 2012, responded to the NAS review. The EIS revised the definitions of the intensity of impacts to wildlife and wildlife habitats, clarified the assumptions underlying those conclusions, and added discussion of the uncertainty of scientific data.

The Secretary issued his decision on November 29, 2012, directing the Park Service to let the permit expire according to its terms. He explained that his decision was "based on matters of law and policy, " including the "explicit terms of the 1972 conveyance from the Johnson Oyster Company to the United States" and "the policies of NPS concerning commercial use within a unit of the National Park System and nonconforming uses within potential or designated wilderness, as well as specific wilderness legislation for Point Reyes National Seashore." He recognized that Section 124 "grant[ed] [him] the authority to issue ...

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