The United States Court of Appeals for the Ninth Circuit issued a 2-1 decision (pdf) affirming a lower court holding that plaintiff environmental groups lacked standing to challenge the renewal of certain water contracts by the Bureau of Reclamation and that other contract renewals by the Bureau were not subject to consultation under section 7(a)(2) of the Endangered Species Act because the renewals constituted non-discretionary actions outside the scope of the consultation requirement.

At issue in the case was the renewal of water contracts between the Bureau and two sets of contractors for Central Valley Project water in California, referred to as the DMC contractors and Settlement contractors.  Plaintiffs alleged that the renewals triggered consultation under section 7(a)(2), and that the Bureau failed to fulfill its obligations under that provision.

The lower court held that the plaintiffs lacked standing to challenge the renewals for the DMC contractors, and the renewals with the Settlement contractors were non-discretionary and therefore not subject to section 7(a)(2).  The Ninth Circuit affirmed.  It noted that the DMC contracts include a shortage provision that allows the Bureau to curtail water deliveries to meet its legal obligations.  The court held that there was no threat of injury because the contracts did not inhibit the ability of the Bureau to fulfill its obligations under section 7(a)(2).  With respect to the Settlement contracts, the court held that federal and state law require the Bureau to renew the contracts.  The court went on to opine that the Bureau’s hands are tied so that section 7(a)(2) is not triggered.