The Fish and Wildlife Service (FWS) issued a final environmental impact statement (FEIS) concerning its implementation of section 206(a) of the Truckee-Carson-Pyramid Lake Water Rights Settlement Act (Settlement Act).[1] As mandated under section 206(a) of the Settlement Act, FWS developed a plan to acquire water and water rights to protect approximately 25,000 wetland acres in the Lahontan Valley in Nevada. After FWS published the FEIS for the plan, Churchill County and the City of Fallon, Nevada sued Norton and others claiming FWS had violated the National Environmental Policy Act (NEPA).[2] The plaintiffs challenged FWS's decision not to prepare a comprehensive environmental impact statement (EIS) that would have analyzed the cumulative impacts of the Settlement Act's interrelated provisions concerning water allocation. The plaintiffs also claimed that the analysis in the FEIS was inadequate. The Ninth Circuit upheld the district court's decision to grant the defendants' motions for summary judgment.

Congress passed the Settlement Act to resolve disputes concerning water rights in the Truckee and Carson Rivers.[3] The Act's purposes include consideration of state interests, fish and wildlife needs, municipal uses, and the Pyramid Lake Pauite Tribe's interests.[4] Among those impacted by allocation decisions for these rivers are the residents of Churchill County--particularly those in the City of Fallon, who rely on the rivers for agricultural irrigation water. Irrigation water also recharges the wells used by the city for its municipal water system.

Various provisions of the Settlement Act address issues of water allocation and harms resulting from overuse. For example, section 205 requires the Secretary of the Interior to establish an agreement with California and Nevada for managing the Truckee River basin's reservoirs.[5] Section 209 requires revision of the Newlands Reclamation Project, a Bureau of Reclamation project to irrigate a large portion of the land in the Fallon area.[6] Section 206(a) in particular attempts to remedy the harm caused to the Lahontan Valley Wetlands by water overusage. The diversion of water from the Carson River for agricultural use has limited the inflow available to these wetlands, causing many of them to dry up. Under section 206(a), the Secretary of Interior must acquire water and water rights adequate to maintain about 25,000 acres of wetlands.[7] To meet this requirement, FWS chose from five alternative plans detailed in its draft environmental impact statement. Under the selected plan, FWS would purchase up to 55,000 acre-feet of water rights from willing sellers. Other methods of acquiring water included using treated sewage water and conserved Navy water if available. The chosen alternative was intended to limit the impacts upon agricultural water needs.

The City of Fallon was concerned that the Settlement Act could limit the water supply to the city. Plaintiffs argued that FWS's actions violated NEPA for two reasons: 1) FWS should have prepared a programmatic EIS concerning all provisions of the Settlement Act that related to water allocation and usage for the Newlands Project; and 2) the FEIS was inadequate because it failed to address effectively cumulative impacts, it failed to address sufficiently groundwater impacts because it relied on incomplete studies, and it severed the wetland conservation from the analysis.

In response to the first claim, the Ninth Circuit held that FWS's decision not to prepare a programmatic EIS was not arbitrary and capricious. The district court had decided that sections 205, 206, 207, 209, and 210(b)(16) of the Settlement Act were not closely related or connected actions, and FWS was not required to analyze the sections' impacts in a comprehensive EIS. Federal regulations require that very closely related actions be analyzed in a single EIS.[8] Regulations also require a programmatic EIS for programs that include "systematic and connected agency decisions allocating agency resources to implement a specific statutory program."[9] Nevertheless, the court indicated that according to Kleppe v. Sierra Club,[10] a programmatic EIS is not required where an actual proposal for broad action had not been made.[11] However, where several proposals are before an agency, the agency must consider their impacts together if the impacts will cumulatively impact a region. Federal regulations also require consideration of cumulative actions in one EIS.[12] The Ninth Circuit discussed three additional cases[13] in which the law concerning programmatic EISs since Kleppe has developed.

In this case, the plaintiffs argued that the interrelated provisions of the Settlement Act were a regional plan for water use of the Truckee and Carson rivers. The court agreed that these provisions all concerned water allocation and that different sections will claim Newland Project water, potentially creating cumulative impacts. In addition, the court indicated that several agency actions concerning these provisions were "proposals" as defined by NEPA.[14] The Ninth Circuit concluded that it would have been reasonable for the agencies to have analyzed the interrelated Settlement Act provisions in a comprehensive EIS. Nevertheless, the court found that the decision to prepare a comprehensive EIS belonged to the FWS and that the FWS's decision was not arbitrary because the agency had not broken implementation of the Settlement Act into separate actions to minimize the significance of cumulative impacts.

In response to the plaintiffs' second claim concerning the adequacy of the FEIS, the Ninth Circuit held that FWS sufficiently analyzed the impacts of the plan to acquire water rights. The court rejected the plaintiffs' claim that FWS did not assess the cumulative impacts of other foreseeable Settlement Act implementation actions in the FEIS. The court explained that FWS was required to analyze specifically the cumulative impacts of past, present, and future actions so that it could decide if and how to reduce such impacts. The Ninth Circuit found the FEIS's analysis legally sufficient, noting that the FEIS discussed the effects of relevant Settlement Act provisions upon a variety of environmental resources.

The court also rejected the plaintiffs' claim that the FEIS was inadequate because of an insufficient analysis of groundwater impacts. Although FWS indicated that additional studies of groundwater resources were necessary, the court concluded that the current studies upon which FWS relied, including a study of recharge areas and a groundwater conceptual model, were sufficient for the FEIS analysis. Finally, the court indicated that the plaintiffs failed to demonstrate that FWS's decision to exclude the wetlands conservation plan in the FEIS was arbitrary and capricious.

In a concurring opinion, Judge Sneed explained that while a comprehensive EIS was not required, an EIS was necessary to find a comprehensive resolution of the water allocation issues involved.