The Ninth Circuit held that ranchers and irrigation districts (Irrigators) with interests adverse to the Endangered Species Act (ESA) could not bring a citizen suit to enforce the Act because they do not fall within the zone of interests sought to be protected. The Irrigators challenged a biological opinion prepared by the U.S. Fish and Wildlife Service (FWS) suggesting that minimum lake levels be maintained to ensure that LostLake and shortnose sucker fish would not go extinct. The suit occurred after the Bureau of Reclamation (BOR), which manages the ClearLake and Gerber Reservoirs, consulted with FWS pursuant to section 7 of the ESA,[1] which requires that FWS assess the impact of the reservoir activities on two species of endangered species. FWS determined that the short- and long-term existence of the fish would be compromised by the continued operation of the reservoirs and suggested that a minimum lake level be maintained. BOR adopted the recommendation.

The plaintiffs, who use the reservoir water for commercial and recreational purposes, sued FWS under the ESA and the Administrative Procedure Act alleging that the opinion was not supported by the true scientific evidence, that FWS violated the consultation provision of the ESA, and that it failed to consider the economic impact when designating critical habitat. The defendants argued that the plaintiffs lacked standing for three reasons: they did not suffer injury in fact because "the document is a nonbinding opinion which in and of itself does not cause any injury to plaintiffs";[2] their injury is not fairly traceable to FWS's violation of obligations under the ESA; and the plaintiffs interests were not within the zone of interest, protected by the ESA. The defendants also argued that there was not a de facto designation of critical habitat because a biological opinion does not include critical habitat designation, that the opinion was not final agency action subject to judicial review, and that the water restrictions were imposed not by FWS, but by BOR which was not joined as a party.

In an unpublished decision,[3] the lower court held that the plaintiffs' interests in the recreational, aesthetic, and commercial value of the water were not within the zone of interests that the ESA seeks to protect. The Ninth Circuit affirmed. It held that the broad language of the ESA that allows any person to sue for a violation did not preclude the application of prudential standing tests. The Ninth Circuit heavily relied on stare decisis, stating that, "[o]ur conclusion follows from the fact that our court, and others have regularly employed the zone of interests test in determining standing despite Congress' enactment of expansive citizen-suit provisions."

In adopting this decision, the court followed the Eleventh Circuit's holding in Davis Forestry Corp. v. Smith,[4] which also applied the zone of interest test to Farm Labor Contractor Registration Act, and the D.C. Circuit, which applied the zone of interest test in State of Idaho, By and Thru Idaho Public Utilities Commission v. ICC.[5] However, the decision conflicts with Defenders of Wildlife v. Hodel.[6]