Case 2:21-cv-02507-GW-AS Document 124 Filed 09/13/22 Page 1 of 16 Page ID #:2116
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`UNITED STATES DISTRICT COURT
`CENTRAL DISTRICT OF CALIFORNIA
`
`CIVIL MINUTES - GENERAL
`Date September 13, 2022
`Case No. CV 21-2507-GW-ASx
`Title
`Center for Biological Diversity, et al. v. U.S. Bureau of Land Management, et al.
`
`Present: The Honorable GEORGE H. WU, UNITED STATES DISTRICT JUDGE
`Javier Gonzalez
`None Present
`Tape No.
`Deputy Clerk
`Court Reporter / Recorder
`Attorneys Present for Plaintiffs:
`Attorneys Present for Defendants:
`None Present
`None Present
`PROCEEDINGS:
`IN CHAMBERS - RULINGS ON: DEFENDANTS' MOTION FOR
`VOLUNTARY REMAND [42]; CADIZ INC. AND CADIZ REAL
`ESTATE LLC'S MOTION TO STRIKE ALLEGATIONS THAT THE
`CADIZ WATER PROJECT WILL CAUSE SIGNIFICANT HARMFUL
`ENVIRONMENTAL IMPACTS [67]; and CADIZ INC. AND CADIZ
`REAL ESTATE LLC'S MOTION FOR PARTIAL SUMMARY
`JUDGMENT [69]
`
`Attached hereto is the Court’s Ruling on the above-entitled Motions. The Court GRANTS the
`Motion for Voluntary Remand and vacates the rights-of-way in light of the BLM’s reconsideration of
`Cadiz’s application.
`In light of this ruling, the Court dismisses without prejudice the pending Motion for Partial
`Summary Judgment, Docket No. 69, and Motion to Strike Allegations that the Cadiz Water Project Will
`Cause Significant Harmful Environmental Impacts, Docket No. 67, as moot. The Court also declines to
`reach the outstanding Motion to File Supplemental Brief of Amici Curiae, Docket No. 116, as it is moot
`at this point.
`A status conference is set for September 26, 2022 at 8:30 a.m.
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`CV-90 (06/04)
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`CIVIL MINUTES - GENERAL
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`Page 1 of 1
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`Case 2:21-cv-02507-GW-AS Document 124 Filed 09/13/22 Page 2 of 16 Page ID #:2117
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`Center for Biological Diversity, Defenders of Wildlife, and Sierra Club v. U.S. Bureau of Land Mgmt. et
`al. and Cadiz, Inc., Intervenor-Defendants, Case No. 2:21-cv-2507-GW-ASx1
`The Native American Land Conservancy and National Parks Conservation Association v. Debra
`Haaland, U.S. Bureau of Land Mgmt. et al. and Cadiz Inc., Intervenor-Defendants, Case No. 5:21-cv-
`00496-GW-ASx
`Rulings on: (1) Motion for Voluntary Remand; (2) Motion for Partial Summary Judgment; and
`(3) Motion to Strike Allegations that the Cadiz Water Project Will Cause Significant Harmful
`Environmental Impacts2
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`I. Background3
`Plaintiffs Center for Biological Diversity (“CBD”), Defenders of Wildlife, the Sierra Club,
`The Native American Land Conservancy (“NALC”), and National Parks Conservation
`Association (“NPCA”)4 (collectively, “Plaintiffs”) sued Defendants Debra Haaland, United States
`Department of the Interior, United States Bureau of Land Management (“BLM”), Nada Wolff
`Culver, Karen Mouritsen, Andrew Archuleta, and Michael Ahrens (collectively, “Federal
`Defendants”), seeking declaratory and injunctive relief as to two rights-of-way which the BLM
`issued to for-profit entity Cadiz, Inc. and its wholly-owned subsidiary, Cadiz Real Estate, LLC
`(collectively, “Cadiz”), which allow Cadiz “to transport water through an existing 64-mile gas
`pipeline, that runs across federal lands from Cadiz to Wheeler Ridge (the ‘Northern Pipeline’).”5
`See Complaint, Docket No. 1, ¶¶ 1-2.
`For some time, Cadiz has sought to extract water from an aquifer underlying its land in
`
`1 Unless otherwise noted, the CM/ECF numbers in this Order correspond to the docket in this case.
`2 The Motion for Partial Summary Judgment and the Motion to Strike Allegations provoked responsive
`briefing from both the Plaintiffs and the Federal Defendants, but because they are dismissed as moot at this point,
`those responsive briefs are not listed here.
`3 The Court has reviewed the filings in this case, including: Defendants’ Motion for Voluntary Remand
`(“Motion” or “Mot.”) (Docket No. 42); Cadiz’s Response in Opposition to Motion for Voluntary Remand (“Opp.”)
`(Docket No. 87); Plaintiffs’ Response to Defendants’ Motion for Voluntary Remand (Docket No. 85); NALC and
`NPCA’s Response to Cadiz’s Opposition to Motion for Voluntary Remand (Docket No. 75); Cadiz’s Response in
`Opposition to Plaintiffs’ Response in Support of Defendants’ Motion for Voluntary Remand (Docket No. 99); Brief
`of Amici Curiae Community Build, Inc., Southern Christian Leadership Conference of Greater Los Angeles, Los
`Angeles Metropolitan Churches, Newstart Housing Corporation, The Two Hundred for Home Ownership,
`Farmworkers Institute for Education & Leadership Development, League of United Latin American Citizens of
`California, and La Cooperative Campesina de California (“Amicus Brief”), Docket No. 86; Plaintiffs’ Response to
`Cadiz’s Opposition to Motion for Voluntary Remand (Docket No. 98); and Defendants’ Reply in Support of Motion
`for Voluntary Remand (Docket No. 97). The facts in this section are derived from the Motion, Cadiz’s Opposition,
`and the factual record, where necessary.
`4 The last two Plaintiffs in this list filed the related case, Case No. 5:21-cv-00496-GW-AS.
`5 Although Cadiz was not initially named in the present lawsuits, the Court granted Cadiz’s motion to
`intervene as a defendant. See Aug. 23, 2021 Order, Docket No. 32.
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`California, located near the Mojave National Preserve and Mojave Trails National Monument, and
`transport it to sell to urban areas near Los Angeles. Mot. at 1. To reach its intended destination,
`the water must cross these federal lands in the Mojave Desert. Id. One of the ways the water can
`be transported is through a northern route, which is the route at issue in this case. Id. at 2. In order
`to accomplish this, Cadiz approached the BLM in July 2020 about potentially converting an
`existing right-of-way grant for a natural gas pipeline to use for water transport. Id.; Opp. at 8. The
`pipeline, to which Cadiz had purchased the rights from the El Paso Natural Gas Company
`(“EPNG”), runs from Cadiz, California to Wheeler Ridge, California. Mot. at 2. EPNG had a
`right-of-way to transport natural gas through the pipeline. Id. at 4.
`In July 2020, Cadiz submitted an application to the BLM for a right-of-way. Id. In the
`application, Cadiz told the BLM that it planned to use the existing (though currently unused)
`natural gas pipeline to transport water. Id. It thus applied for a right-of-way to convey the water
`through the EPNG pipeline. Id. On September 23, 2020, Cadiz emailed the BLM about assigning
`the EPNG right-of-way, which that company used to transport natural gas through the pipeline, to
`Cadiz. Id. Cadiz told the BLM in the email that closing on the agreement between EPNG and
`Cadiz for the pipeline and right-of-way was “predicated on BLM’s approval of the assignment of
`the [EPNG] ROW to Cadiz.” Id. Cadiz emphasized that time was of the essence. Id. In an
`October 12, 2020 email, Cadiz suggested several options for processing the right-of-way: (1) the
`BLM could process the application all at once and amend the existing right-of-way, or (2) the
`BLM could take two separate steps – first, reassigning the existing right-of-way to Cadiz, and
`second, granting a new right of way under the Federal Land Policy and Management Act
`(“FLPMA”) for a water pipeline. Id. After a meeting with Cadiz, the BLM committed to
`completing its decision on the right-of-way by December 2020. Id. at 4-5.
`When the BLM processed the application, it followed the suggestion by Cadiz to split the
`process. As the Federal Defendants describe,
`BLM chose to process the application in two steps: the reassignment
`of the existing Mineral Leasing Act (“MLA”) right-of-way for oil
`and gas transport and the grant of a new FLPMA right-of-way for
`water transport. On December 11, 2020, BLM prepared two
`categorical exclusions (“CX”), one for each step. See Cadiz2020-
`00583, Cadiz2020-00650. For the MLA right-of-way, BLM relied
`on a CX specified in the U.S. Department of the Interior’s manual,
`516 DM 11.9 E.(9), which applies to renewals of rights-of-way
`“where no additional rights are conveyed beyond those granted by
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`the original authorizations.” Cadiz2020-00584. For the FLPMA
`right-of-way, BLM relied on the CX in 516 DM 11.9 E.(12), which
`applies to “[g]rants of right-of-way wholly within the boundaries of
`other compatibly developed rights-of-way.” Cadiz2020-00650. For
`each CX, BLM concluded that there were no extraordinary
`circumstances associated with the actions that would require the
`preparation of an environmental analysis. Cadiz2020-00587;
`Cadiz2020-00654.
`Mot. at 5 (citations to the record notated as “Cadiz2020-#####”). The BLM also found that both
`right-of-way grants fell within Exemption B8 of the California Protocol Agreement (“PA”), which
`is the alternative process by which the BLM in California satisfies its obligations under the
`National Historic Preservation Act (“NHPA”). Id. This exemption excuses compliance with
`Section 106, which requires a separate review of potential adverse effects on historic properties.
`Id. But when Plaintiffs filed an objection to the use of Exemption B8 on December 10, 2020, the
`BLM explained to the California State Historic Preservation Officer (“SHPO”) that it was no
`longer relying on Exemption B8. Id. at 6. Rather, it was relying on 36 C.F.R. pt. 800, and the
`BLM concluded that the right-of-way had “independent utility” – meaning that it was “not related
`to any other authorization for the use of public or private land and, specifically, was ‘not linked to
`the use of the groundwater under private lands held by Cadiz.’” Id. (quoting letter to SHPO).
`On December 21, 2020, BLM issued a decision that transferred a portion of the EPNG
`MLA right-of-way to Cadiz and simultaneously granted a new, coextensive FLPMA right-of-way
`to Cadiz. Mot. at 6. Because the BLM had concluded that each right-of-way was covered by a
`“categorical exclusion” (“CX”), it did not prepare environmental analyses for them.
`On March 23, 2021, Plaintiffs filed related lawsuits challenging this decision, alleging that
`“BLM fast-tracked the normal review process” and granted Cadiz’s request for the rights-of-way
`“with a haste that vitiated necessary compliance with the National Historic Preservation Act
`(‘NHPA’) and the National Environmental Policy Act (‘NEPA’).” Compl. ¶¶ 5, 10. Plaintiffs
`further allege that BLM failed to abide by its statutorily required duties under the FLPMA and that
`its grant of the FLPMA right-of-way to Cadiz was arbitrary, capricious, an abuse of discretion or
`otherwise not in accordance with law such that it violated the Administrative Procedure Act
`(“APA”). See id. ¶¶ 12, 14. Accordingly, Plaintiffs request that the Court: (1) find and declare
`BLM’s grant of an FLPMA right-of-way to Cadiz to have violated the APA, NHPA, NEPA, and
`FLPMA; (2) vacate BLM’s grant of the Northern Pipeline/EPNG right-of-way to Cadiz and
`remand the matter to BLM for further consideration consistent with applicable laws and
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`regulations; (3) enjoin BLM from authorizing or otherwise allowing any operation or modification
`of the Northern Pipeline for water transportation until BLM fully complies with the NHPA, NEPA,
`FLPMA, and all other applicable laws and regulations; and (4) award Plaintiffs fees and costs. See
`id. at 66.
`The Federal Defendants agree – at least in part – with Plaintiffs and wish to remand for
`further agency consideration. Before the Court now is the Federal Defendants’ Motion for
`Voluntary Remand (“Motion”), Docket No. 42. The Federal Defendants ask the Court to “grant a
`remand of BLM’s decision to issue a right-of-way to [Cadiz] allowing it to operate a pipeline to
`transport water between Cadiz and Barstow, California” because “[i]n making that decision, BLM
`did not adequately analyze the potential environmental impacts of granting the right-of-way under
`the National Environmental Policy Act (‘NEPA’) and did not sufficiently evaluate potential
`impacts to historic properties under the National Historic Preservation Act (‘NHPA’).” Mot. at 1.
`Cadiz has filed an opposition, see Docket No. 87, and the parties have engaged in extensive
`briefing as described in note 3, supra.
`II. Legal Standard
`A. Voluntary Remand
`When a court is reviewing an agency action, the court has equitable power to remand the
`action for back to the agency for further consideration. See SKF USA Inc. v. United States, 254
`F.3d 1022, 1028 (Fed. Cir. 2001); Nat. Res. Def. Council, Inc. v. U.S. Dep’t of Interior (“NRDC”),
`275 F. Supp. 2d 1136, 1141 (C.D. Cal. 2002). “Voluntary remand is consistent with the principle
`that ‘administrative agencies have an inherent authority to reconsider their own decisions, since
`the power to decide in the first instance carries with it the power to reconsider.’” NRDC, 275 F.
`Supp. 2d at 1141 (quoting Trujillo v. General Electric Co., 621 F.2d 1084, 1086 (10th Cir. 1980)).
`
`In considering a remand, courts typically look to SKF USA for the standard of review. The
`Federal Circuit in that case described five general positions an agency may take when a court is
`considering remand. See SKF USA, 254 F.3d at 1027-30. Two are relevant here: (1) requesting a
`remand, “without confessing error, to reconsider its previous position,” and (2) requesting a
`remand because the agency “believes that its original decision was incorrect on the merits and it
`wishes to change the result.” Id. at 1028. With respect to the first scenario, the SKF USA court
`explained that in such a case, the agency:
`might argue, for example, that it wished to consider further the
`governing statute, or the procedures that were followed. It might
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`simply state that it had doubts about the correctness of its decision
`or that decision’s relationship to the agency’s other policies.
`Id. at 1029. In such a case, the “reviewing court has discretion over whether to remand.” Id.; see
`also N. Coast Rivers All. v. United States Dep’t of the Interior, No. 16-CV-00307-LJO-(MJSx),
`2016 WL 8673038, at *3 (E.D. Cal. Dec. 16, 2016). “A remand may be refused if the agency’s
`request is frivolous or in bad faith.” SKF USA, 254 F.3d at 1029; see also Lutheran Church-
`Missouri Synod v. F.C.C., 141 F.3d 344, 349 (D.C. Cir. 1998) (noting a “novel, last second motion
`to remand” premised on a prospective policy statement that would not bind the agency as a basis
`to deny remand). But “if the agency’s concern is substantial and legitimate, a remand is usually
`appropriate.” SKF USA, 254 F.3d at 1029. Indeed, “[o]ne way an agency may demonstrate good
`faith is by admitting that the reasoning adopted in its original action was flawed.” N. Coast Rivers
`All., 2016 WL 8673038, at *3. “In contrast, bad faith may be demonstrated when an agency’s
`position does not demonstrate a commitment to a changed approach.” SKF USA, 254 F.3d at 1029.
`
`As to the second scenario, “the agency may request a remand because it believes that its
`original decision is incorrect on the merits and wishes to change the result.” Id. Whereas remand
`to an agency to correct simple errors is “generally appropriate,” a “voluntary remand request
`associated with a change in agency policy or interpretation” is a “more complex question.” Id.
`The SKF USA court noted that:
`[i]f there is a step one Chevron issue – that is, an issue as to whether
`the agency is either compelled or forbidden by the governing statute
`to reach a different result – a reviewing court again has considerable
`discretion. It may decide the statutory issue, or it may order a
`remand.
`Id. But where there is no issue as to the agency’s power under the governing statute, “a remand to
`the agency is required, absent the most unusual circumstances verging on bad faith.” Id. at 1029-
`30. “[A]n agency must be allowed to assess ‘the wisdom of its policy on a continuing basis.’” Id.
`at 1030 (quoting Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 864 (1984)).
`As the court wrote in SKF USA,
`Under the Chevron regime, agency discretion to reconsider policies
`does not end once the agency action is appealed. See Auer v.
`Robbins, 519 U.S. 452, 462–63 (1997) (deferring to agency’s
`interpretation of its own regulation advanced in litigation). We have
`noted that “[a]ny assumption that Congress intended to freeze an
`administrative interpretation of a statute, which was unknown to
`Congress, would be entirely contrary to the concept of Chevron—
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`which assumes and approves the ability of administrative agencies
`to change their interpretation.” [Micron Tech., Inc. v. United States,
`243 F.3d 1301, 1312 (Fed. Cir. 2001)].
`
`Id.
`In either scenario, the court is given wide discretion to remand back to the agency. Id. at
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`1029-30. Absent bad faith, general deference to agency decision-making counsels remand when
`an agency so moves. “Generally, courts only refuse voluntarily requested remand when the
`agency’s request is frivolous or made in bad faith.” Calif. Cmtys. Against Toxics v. U.S. E.P.A.,
`688 F.3d 989, 992 (9th Cir. 2012). For example, “where the administrative record of an agency
`action does not support the action, the proper course is to remand the decision to the agency.”
`NRDC, 275 F. Supp. 2d at 1141. “[B]ad faith may be demonstrated when an agency’s position
`does not demonstrate a commitment to a changed approach.” N. Coast Rivers All., 2016 WL
`8673038, at *3. Remand to an agency also serves the purposes of agency decision-making –
`namely, judicial economy and deference to expertise. “Voluntary remand . . . promotes judicial
`economy by allowing the relevant agency to reconsider and rectify an erroneous decision without
`further expenditure of judicial resources.” NRDC, 275 F. Supp. 2d at 1141; see also Micron Tech.,
`243 F.3d at 1312.
`B. Vacatur of Agency Action
`When a motion for voluntary remand is granted, the court must then determine whether the
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`agency action should be vacated during the remand. “A flawed rule need not be vacated,” Calif.
`Cmtys. Against Toxics, 688 F.3d at 992, but “vacatur of an unlawful agency action normally
`accompanies a remand[,]” with some exceptions. All. for the Wild Rockies v. United States Forest
`Serv., 907 F.3d 1105, 1121 (9th Cir. 2018); see also Nat’l Fam. Farm Coal. v. U.S. Env’t Prot.
`Agency, 960 F.3d 1120, 1144 (9th Cir. 2020) (“We order remand without vacatur only in limited
`circumstances.” (internal citation omitted)). “‘[W]hen equity demands, the regulation can be left
`in place while the agency follows the necessary procedures’ to correct its action.” Calif. Cmtys.
`Against Toxics, 688 F.3d at 992 (quoting Idaho Farm Bureau Fed’n v. Babbitt, 58 F.3d 1392, 1405
`(9th Cir. 1995)); see also All. for the Wild Rockies, 907 F.3d at 1121 (“When equity demands, . . .
`the regulation can be left in place while the agency reconsiders or replaces the action, or to give
`the agency time to follow the necessary procedures.”).
`“Whether agency action should be vacated depends on how serious the agency’s errors are
`‘and the disruptive consequences of an interim change that may itself be changed.’” Calif. Cmtys.
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`Against Toxics, 688 F.3d at 992 (quoting Allied–Signal, Inc. v. U.S. Nuclear Regulatory Comm’n,
`988 F.2d 146, 150-51 (D.C. Cir. 1993)); see also Nat’l Fam. Farm. Coal., 960 F.3d at 1144 (“To
`determine whether vacatur is appropriate, we weigh the seriousness of the agency’s errors against
`the disruptive consequences of an interim change that may itself be changed.” (internal citation
`omitted)). The court should also “consider the extent to which either vacating or leaving the
`decision in place would risk environmental harm.” Nat’l Fam. Farm. Coal., 960 F.3d at 1144-45.
`Courts have also “looked at whether the agency would likely be able to offer better reasoning or
`whether by complying with procedural rules, it could adopt the same rule on remand, or whether
`such fundamental flaws in the agency’s decision make it unlikely that the same rule would be
`adopted on remand.” Pollinator Stewardship Council v. U.S. E.P.A., 806 F.3d 520, 532 (9th Cir.
`2015). “A federal court ‘is not required to set aside every unlawful agency action,’ and the
`‘decision to grant or deny injunctive or declaratory relief under APA is controlled by principles of
`equity.’” All. for the Wild Rockies, 907 F.3d at 1121 (quoting Nat’l Wildlife Fed’n v. Espy, 45
`F.3d 1337, 1343 (9th Cir. 1995)).
`III. Discussion
`The Federal Defendants argue that because the BLM did not undertake the requisite
`environmental analyses, the case should be remanded to the BLM. As the Federal Defendants
`state, “[t]his is not a case where BLM conducted an appropriate level of analysis, in which the
`court might find some technical legal errors. Instead, BLM failed to prepare the required analyses
`altogether.” Mot. at 22. More specifically, the Federal Defendants argue that by, inter alia, (1) not
`engaging in a full NEPA environmental analyses that considered the potential impacts of drawing
`down the water by the rights-of-way at issue, (2) not considering the potential effects of the project
`on any historic properties protected by the NHPA, and (3) lacking sufficient information to make
`a FLPMA determination, a remand is appropriate so that the BLM can undertake these statutorily
`required analyses. The Federal Defendants also contend that vacatur of the rights-of-way is
`appropriate because the analyses under NEPA, NHPA, or FLPMA undertaken were insufficient.
`Furthermore, the Federal Defendants argue that vacatur is appropriate because the legal errors are
`serious – namely, where the BLM granted a new right-of-way for a water pipeline without
`evaluating the impacts of water drawdowns on the environment – and vacatur will cause disruption
`only to Cadiz, which took the risk that its rights-of-way might be subsequently deemed invalid.
`The Plaintiffs agree. Plaintiffs CBD, Defenders of Wildlife, and the Sierra Club contend
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`that remand falls squarely within the parameters set by the SKF USA court because the agency
`would like to “consider further . . . the procedures that were followed.” Plaintiffs’ Response to
`Defendants’ Motion for Voluntary Remand, Docket No. 85 at 6-7 (quoting SKF USA, 254 F.3d at
`1027-29). It is enough, say Plaintiffs, that the agency has doubts about the correctness of its
`decision. Id. at 7. Plaintiffs NALC and NPCA further contend that remand is appropriate here,
`particularly where Cadiz may continue seeking a right-of-way across government lands following
`remand by “providing any additional information required to enable BLM to timely reprocess its
`application in accordance with the law.” Plaintiffs’ Response to Cadiz’s Opposition to Motion for
`Voluntary Remand, Docket No. 75 at 2.6
`
`Cadiz argues against remand and vacatur, contending that (1) the motion is frivolous or in
`bad faith because the government has “invented” error with no legal basis, (2) there are no legal
`bases for the Federal Defendants’ claims of error under NHPA and FLPMA, (3) vacatur is not
`appropriate because the BLM has not followed its own regulations applicable to terminating or
`suspending a right-of-way, and (4) any professed error is illusory and the consequences are
`irreversible and vast. See generally Opp., Docket 87.
`
`The Court first addresses remand and then turns to vacatur.
`A. Remand
`The Court would conclude that remand is proper here. The Court has broad discretion to
`determine when to send a case back to an agency when the agency asks for remand. Under either
`standard presented above – whether the agency asks for remand with or without admitting error –
`the standard (1) is deferential to the agency and (2) allows for the Court’s discretion.
`As the Court noted above, “[v]oluntary remand is consistent with the principle that
`‘administrative agencies have an inherent authority to reconsider their own decisions, since the
`power to decide in the first instance carries with it the power to reconsider.’” NRDC, 275 F. Supp.
`2d at 1141. In general, the Court should defer to that authority. The BLM here is telling the Court
`that it erred in its decision not to undertake a full NEPA, NHPA, and FLPMA review when the
`issue was presented to it in 2020. It is perfectly possible that, on remand, the BLM will determine
`that the rights-of-way at issue are permissible under the relevant statutory frameworks, and it will
`confirm that the rights-of-way were properly issued.7 But if an agency tells a court that it erred ab
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`6 This filing appears in the related case, Case No. 5:21-cv-00496-GW-ASx.
`7 Indeed, upon remand, every party (and nonparty) in this case will have further opportunity to make their
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`initio by not fully engaging in the administrative decision-making process, it seems that a court
`should listen. The authority inherent to an agency means that it must be allowed to assess “the
`wisdom of its policy on a continuing basis.” SKF USA, 254 F.3d at 1030.
`And the Court would conclude that there is no bad faith or frivolous action here. Cadiz
`argues that the BLM is acting in bad faith and/or frivolously, but Cadiz does not support this
`argument with persuasive or binding case law and/or evidence. This is not a scenario in which an
`agency – for example – compiled a full NEPA record, came to a well-supported opinion, and then
`reversed its opinion mere months later. Here, there is no Environmental Assessment (“EA”),
`Environmental Impact Statement (“EIS”), or accompanying record of decision, for example – only
`what appears to be a rushed,8 cursory decision to grant the rights-of-way under categorical
`exclusions. Cadiz’s argument that the legal errors are illusory and thus frivolous is unavailing.
`The agency is responsible for determining whether a particular action requires certain types of
`review (under NEPA, the NHPA, and FLPMA, for example), and the agency is now informing the
`Court that it got that decision wrong the first time around. In such a scenario, a reviewing court
`“may decide the statutory issue, or it may order a remand.” SKF USA, 254 F.3d at 1029.
`a. APA Analysis
`The Federal Defendants and Plaintiffs contend that the BLM did not perform sufficient
`environmental analyses under NEPA, NHPA, or FLPMA. See Mot. at 22; see also Plaintiffs’
`Response to Defendants’ Motion for Voluntary Remand, Docket No. 85 at 9-10. The Court will
`address each argument in turn below.
`The APA governs a court’s review of agency action pursuant to NEPA, NHPA, or FLPMA.
`See Nw. Res. Info. Ctr., Inc. v. Nat’l Marine Fisheries Serv., 56 F.3d 1060, 1066 (9th Cir. 1995)
`(NEPA); Ctr. for Biological Diversity v. Esper, 958 F.3d 895, 903 (9th Cir. 2020) (NHPA); Nat’l
`Mining Ass’n v. Zinke, 877 F.3d 845, 866 (9th Cir. 2017) (FLPMA). Under the APA, “an agency
`decision will be set aside if it is ‘arbitrary, capricious, an abuse of discretion, or otherwise not in
`accordance with the law.’” Cascadia Wildlands v. Bureau of Indian Affairs, 801 F.3d 1105, 1110
`(9th Cir. 2015); 5 U.S.C. § 706(2)(A); see also Kalispel Tribe of Indians v. U.S. Dep’t of Interior,
`999 F.3d 683, 688 (9th Cir. 2021). An agency decision is arbitrary and capricious where it “relied
`
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`arguments, present evidence, and be heard during agency review.
`8 It strikes the Court as a quick turnaround for the right-of-way decision to have been issued within a matter
`of several months in late 2020.
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`on factors Congress did not intend it to consider, entirely failed to consider an important aspect of
`the problem, or offered an explanation that runs counter to the evidence before the agency or is so
`implausible that it could not be ascribed to a difference in view or the product of agency expertise.”
`Kalispel Tribe, 999 F.3d at 688 (quoting Ecology Ctr. v. Castaneda, 574 F.3d 652, 656 (9th Cir.
`2009)) (omitting internal quotation marks); see also Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v.
`State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42-43 (1983) (“[T]he agency must examine the
`relevant data and articulate a satisfactory explanation for its action including a ‘rational connection
`between the facts found and the choice made.’” (quoting Burlington Truck Lines v. United States,
`371 U.S. 156, 168 (1962))); Protect Our Cmtys. Found. v. LaCounte, 939 F.3d 1029, 1034 (9th
`Cir. 2019) (“As a general rule, we will ‘uphold agency decisions so long as the agencies have
`considered the relevant factors and articulated a rational connection between the factors found and
`the choices made.’” (quoting City of Sausalito v. O’Neill, 386 F.3d 1186, 1206 (9th Cir. 2004))).
`Under NEPA, federal agencies, like the BLM, are required to take a “hard look” at the
`environmental consequences of their actions. Metcalf v. Daley, 214 F.3d 1135, 1141 (9th Cir.
`2000). This typically requires the agency to prepare an EA or EIS, unless a proposed action falls
`within a categorical exclusion. See 40 C.F.R. § 1501.4(a). However, to adopt a categorical
`exclusion, the agency must “provide for extraordinary circumstances in which a normally excluded
`action may have a significant environmental effect.” Id.
`Here, the BLM did neither. There is no EA or EIS, and the BLM admitted that it did not
`“adequately evaluat[e] whether extraordinary circumstances existed.” Mot. at 12. While the BLM
`knew that Cadiz intended to transport water through the pipeline in the right-of-way, the BLM did
`not (1) identify the source of the water that would be transported or (2) evaluate the potential
`environmental impacts of drawing down water from such source. Far from satisfying its “hard
`look” obligation under NEPA, the BLM failed to conduct any substantive analysis on whether the
`proposed action had “a direct relationship to other actions with individually insignificant but
`cumulatively significant environmental effects,” in violation of NEPA regulations. See 43 C.F.R.
`§ 46.215(f). “An ‘agency cannot . . . avoid its statutory responsibilities under NEPA merely by
`asserting that an activity it wishes to pursue will have an insignificant effect on the environment.”
`Steamboaters v. F.E.R.C., 759 F.2d 1382, 1393 (9th Cir. 1985) (quoting Township of Lower
`Alloways Creek v. Pub. Serv. Elec. & Gas Co., 687 F.2d 732, 741 (3d Cir. 1982). As the Federal
`Defendants acknowledge, the BLM could reasonably foresee the effect of granting the right-of-
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`way and should have evaluated the potential impacts of drawing down water. The Court therefore
`would find that the BLM failed to take its required “hard look” under NEPA at the environmental
`impact of drawing down water by the grant of the rights-of-way at issue.
`Turning to the BLM’s analysis under the NHPA, “Section 106 of NHPA is a ‘stop, look,
`and listen’ provision that requires each federal agency to consider the effects of its programs.”
`Muckleshoot Indian Tribe v. U.S. Forest Serv., 177 F.3d 800, 805 (9th Cir. 1999); see also United
`States v. 0.95 Acres of Land, 994 F.2d 696, 698 (9th Cir. 1993) (“NHPA is similar to NEPA except
`that it requires consideration of historic sites, rather than the environment.”). Section 106 requires
`the BLM to “take into account the effect of the undertaking on any historic property.” 54 U.S.C.
`§ 306108.
`Pursuant to Section 106, the BLM must “‘make a reasonable and good faith effort to
`identify historic properties; determine whether identified properties are eligible for listing on the
`National Register . . . [and] assess the effects of the undertaking on any eligible historic properties
`found.’” WildEarth Guardians v. Provencio, 923 F.3d 655, 676 (9th Cir.