Environmental groups Native Ecosystems Council and Bear Creek Council (collectively Bear Creek) challenged the approval of a timber sale by officials within the Department of Agriculture and Department of the Interior (collectively Defendants). Specifically, Bear Creek argued that the United States Forest Service (USFS) violated the National Environmental Policy Act (NEPA)[1] and the National Forest Management Act (NFMA)[2] by making a specific amendment to the Gallatin National Forest Plan (Forest Plan) that waived the requirement of a seventy percent Habitat Effectiveness Index (HEI)[3] and allowed more open roads than originally permitted. Bear Creek also claimed that the defendants violated the Endangered Species Act (ESA)[4] by failing to consider relevant factors in evaluating the effect of the sale on grizzly bears (Ursus arctos horribilis). At the administrative level, both arguments were denied. The district court granted summary judgment for the Defendants on all counts, and Bear Creek appealed. A divided Ninth Circuit affirmed in part and reversed in part.

The Administrative Procedure Act[5] governs judicial review of agency actions, authorizing the setting aside of an agency's decision if it is found to be arbitrary, capricious, or an abuse of discretion.[6] At issue in this case was the Darroch-Eagle timber sale, one of twelve proposed sales within the Gallatin National Forest on the northern boundary of Yellowstone National Park. USFS amended the Forest Plan for the Darroch-Eagle sale to allow for more open roads after the sale, in part due to the fact that the plot already had more open roads than allowed prior to the sale. USFS also proposed amending the road density requirement for the other eleven sales.

The Ninth Circuit first addressed Bear Creek's NEPA claim. While agreeing in part with the reasoning of the district court, the Ninth Circuit held that the district court erred in granting summary judgment to the defendants on the NEPA issue. Bear Creek argued that 1) USFS did not conduct a timely environmental assessment (EA), 2) that the proposed amendments for all twelve sales were connected and cumulative and thus had to be assessed together, and 3) that the EA was insufficient because it did not address the cumulative impact of all twelve timber sales. Under NEPA, an agency can conduct an EA rather than the more exhaustive environmental impact statement (EIS) when it determines that the proposed action will not have a significant affect on the environment.[7] However, that EA must be conducted at an early point before commitment of resources to the action.[8] The Ninth Circuit affirmed the district court's determination that a memorandum contemplating waiver of the road density requirement prior to the EA did not indicate, in absence of other evidence, an irreversible commitment to the proposed sale, and thus did not invalidate that EA for timeliness.

The Ninth Circuit also found that a comprehensive EA for all the road density amendments was not required by NEPA because the actions were not connected or cumulative. In determining whether the proposed amendments were "connected,"[9] and thus required a comprehensive assessment, the Ninth Circuit applied an "independent utility" test and found that because each timber sale could proceed independently of the others, they were not connected for purposes of NEPA.[10] Next, the Ninth Circuit evaluated whether the site-specific amendments had a cumulative impact requiring a comprehensive EA. Applying a "[c]umulative actions" test, the court found that although the waiver of road density for all the sales could create a significant environmental impact, they were not "[c]umulative
actions" because each amendment would be adopted separately over a period of time.[11]

However, in considering whether the EA was sufficient to assess the impact of the waived HEI requirement, the Ninth Circuit held that the EA was deficient because it failed to provide a sufficient analysis of the cumulative impact of the road density requirement waiver for all the proposed sales within the greater Gallatin National Forest. In circumstances where "reasonably foreseeable future actions" contribute to a significant impact,[12] that combined impact must be assessed in the EA. Because the cumulative impact was not evaluated, a divided Ninth Circuit panel held that the district court erred in granting summary judgment on the NEPA claim.

The Ninth Circuit next affirmed the district court's decision that USFS did not violate NFMA by amending the open road density requirement for the proposed sale. NFMA provides a template for forest planning that requires the development of a forest plan for an entire forest and then requires site-specific level implementation consistent with that plan.[13] Bear Creek argued that USFS, by waiving the HEI for all of the proposed sales, made a significant amendment to the Forest Plan without preparing an EIS as required by NFMA.[14] The agency had determined that the amendment was not significant and thus did not prepare an EIS. The Ninth Circuit agreed that NFMA did not require cumulative assessments of all the proposed amendments because some of them were not yet adopted. Further, the court held that because the single amendment did not alter annual forest outputs or multiple use goals, the agency did not act arbitrarily in finding no significant impact warranting an EIS.

Finally, the Ninth Circuit reversed the decision of the district court on the ESA claim, holding that the actions of USFS were unlawful. Bear Creek argued that USFS violated the ESA by arbitrarily drawing the boundaries for its analysis of the proposed sale's effect on the threatened grizzly bear. Under the ESA, USFS must ensure via a biological assessment (BA) that any action it takes is unlikely to jeopardize the existence of threatened or endangered species.[15] The court explained that the proposed timber sale is within prime grizzly bear habitat and the species might be affected by the sale due to the change in food and foraging areas. Bear Creek challenged the BA for arbitrarily drawing the boundaries of the assessment area to exclude nearby sheep grazing land (sheep grazing land is dangerous to bears because they may be killed or relocated if they target this easy food source). A BA must include "all areas to be affected directly or indirectly" by the proposed action.[16] The action area USFS defined lopsidedly extended 16.5 miles in one direction from the proposed sale but only 1.5 miles to the east, excluding the sheep allotment. The Ninth Circuit found USFS acted arbitrarily in defining the assessment area because it failed to provide any basis--scientific or otherwise--to justify the peculiar boundaries it defined. The Ninth Circuit reversed the district court in granting summary judgment for the defendants on the ESA claim.

Judge Thompson concurred as to the NFMA and ESA claims, but dissented from the majority opinion on the NEPA claim. He found the majority erred by failing to consider any of the factors relevant to selecting the appropriate geographical scope for the EA,[17] instead requiring the EA to consider cumulative impacts of road density across the entire forest because the Forest Plan included density requirements. Judge Thompson found this scope to be overly broad. Finding inadequate evidence that USFS acted arbitrarily in defining the scope, he would have affirmed the holding of the district court on this point.