UNITED STATES DISTRICT COURT DISTRICT OF OREGON ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) )

JOHN M. GROEN Groen Stephens & Klinge, LLP 2101-112th Avenue NE, Suite 110 Bellevue, Washington 98004 Telephone: (425 453-6206 Facsimile: (425 453-6224 jgroen@gskonline.com OSB No. 93160 ROBIN L. RIVETT RUSSELL C. BROOKS Pacific Legal Foundation 10940 NE 33rd Place, Suite 109 Bellevue, Washington 98004 Telephone: (425 576-0484 Facsimile: (425 576-9565 rlr@pacificlegal.org rb@pacificlegal.org Attorneys for Plaintiffs UNITED STATES DISTRICT COURT DISTRICT OF OREGON CALIFORNIA STATE GRANGE, et al., Plaintiffs, v. DONALD L. EVANS, et al., Defendants, and WATERWATCH OF OREGON, et al., Defendants-Intervenors, and YUROK TRIBE, Defendant-Intervenor. No. 02-6044-HO PLAINTIFFS RESPONSE TO DEFENDANTS AND DEFENDANTS-INTERVENORS MOTIONS FOR SUMMARY JUDGMENT Note on Motion Calendar: Telephonic Oral Argument January 11, 2005, 11:00 a.m. MOTIONS FOR SUMMARY JUDGMENT

TABLE OF CONTENTS Page TABLE OF AUTHORITIES.................................................... iii INTRODUCTION............................................................. 1 ARGUMENT................................................................. 4 I. THIS COURT SHOULD FOLLOW THE ADMINISTRATIVE PROCEDURE ACT S EXPRESS REMEDY OF SETTING ASIDE AN UNLAWFUL ADMINISTRATIVE RULE.................................. 4 A. Congress Clearly Intended for Courts to Set Aside Unlawful Agency Rules and Did Not Provide an Exception in the APA............................... 4 B. Important Policy Concerns Should Counsel This Court Not to Apply a Judicially-Created Exception to Congress Clear Mandate Where Congress Has Not Authorized Departure from Its Express Command..................... 6 II. EVEN ASSUMING FOR SAKE OF ARGUMENT THAT A JUDICIALLY- CREATED EXCEPTION TO CONGRESS EXPRESS REMEDY IS PERMISSIBLE AND, ASSUMING THIS COURT CHOOSES TO APPLY THE EXCEPTION, THIS COURT IS BOUND BY THE EXCEPTION UTILIZED BY THE NINTH CIRCUIT COURT OF APPEALS.................... 8 A. To the Extent This Court Applies a Judicially-Created Exception in This Case, the Test Utilized by the Ninth Circuit Court of Appeals Is Controlling....... 8 B. The Test on Which NMFS Relies Carries No Weight in This Court and Should Be Disregarded Because It Departs from the Judicially-Created Exception Utilized by the Ninth Circuit................... 12 C. This Court Need Not Accept NMFS Invitation to Avoid Ninth Circuit Precedent and Apply the Modesto Decision to This Case...................... 15 III. TO WHATEVER EXTENT THE COURT DECIDES TO BALANCE THE HARMS OF VACATING THE ILLEGAL RULE, THE BALANCE CLEARLY WEIGHS HEAVILY IN FAVOR OF THE GRANGES................ 17 A. Given the Opportunity, the Opposing Parties Utterly Fail to Prove Any Harm Will Occur to SONCC Coho Absent the Unlawful Listing............... 17 1. The Lecky Declaration Fails to Support NMFS Argument................ 17 2. The Lecky Declaration and NMFS Proposed Relisting Demonstrate SONCC Coho Are Thriving............................. 19 MOTIONS FOR SUMMARY JUDGMENT - Page i

Page 3. No Harm Will Occur to the SONCC Coho Because Other Federal Protections Will Remain in Place Absent NMFS Unlawful Listing......... 22 4. In Addition to Significant Federal Protections, Both the State of Oregon and the State of California Will Continue to Protect SONCC Coho Under Important State Regulations....................... 24 B. The Opposing Parties Failed to Effectively Dispute the Granges Ongoing Harm............................................ 25 CONCLUSION.............................................................. 27 MOTIONS FOR SUMMARY JUDGMENT - Page ii

TABLE OF AUTHORITIES Page MOTIONS FOR SUMMARY JUDGMENT - Page iii Cases Alaniz v. Office of Personnel Management, 728 F.2d 1460 (Fed. Cir. 1984................ 9 Alsea Valley Alliance v. Department of Commerce, 358 F.3d 1181 (9th Cir. 2004........... 1 Alsea Valley Alliance v. Evans, 161 F. Supp. 2d 1154 (D. Or. 2001................... 1, 20 Anderson v. Evans, 350 F.3d 815 (9th Cir. 2003................................... 5-6 Bennett v. Spear, 520 U.S. 154 (1997............................................. 5 Bonnichsen v. United States, 357 F.3d 962 (9th Cir. 2004.............................. 5 County of Del Norte v. United States, 732 F.2d 1462 (9th Cir. 1984.................. 10, 15 Endangered Species Committee v. Babbitt, 852 F. Supp. 32 (D.D.C. 1994................ 13 Federal Election Commission v. Akins, 524 U.S. 11 (1998.......................... 6, 20 Firebaugh Canal Co. v. United States, 203 F.3d 568 (9th Cir. 2000...................... 5 Forest Guardians v. Babbitt, 174 F.3d 1178 (10th Cir. 1999........................... 4 Home Builders Ass n of Northern California v. United States Fish & Wildlife Service, 268 F. Supp. 2d 1197 (E.D. Cal. 2003................................ 10-11 Idaho Farm Bureau v. Babbitt, 58 F.3d 1392 (9th Cir. 1995........................ 10-15 International Union, United Mine Workers of America v. Federal Mine Safety and Health Administration, 920 F.2d 960 (D.C. Cir. 1990.......................... 13 JSG Trading Corp. v. United States Department of Agriculture, 176 F.3d 536 (D.C. Cir. 1999........................................................... 20 Modesto Irrigation District v. Evans, No. Civ. F-02-6553 OWW DLB (E.D. Cal. May 12, 2004................................................. 13-16 Native Ecosystems Council v. Dombeck, 304 F.3d 886 (9th Cir. 2002.................... 4 Natural Resources Defense Council v. United States Department of Interior, 275 F. Supp. 2d 1136 (C.D. Cal. 2002...................................... 11, 18 Nat l Ass n of Home Builders v. Norton, 340 F.3d 835 (9th Cir. 2003.................... 5 Nat l Ass n of Home Builders v. Norton, No. Civ. 00-0903-PHX-SRB (June 28, 2004............................................................ 14

MOTIONS FOR SUMMARY JUDGMENT - Page iv Page Ninilchik Traditional Council v. United States, 227 F.3d 1186 (9th Cir. 2000.............. 7 Pacific Bell v. Pac-West Telecomm., Inc., 325 F.3d 1114 (9th Cir. 2003............................................................ 16 Safari Aviation, Inc. v. Garvey, 300 F.3d 1144 (9th Cir. 2002........................... 7 Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80 (1943............... 6 Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978.............................. 12 Thomas Jefferson University v. Shalala, 512 U.S. 504 (1994......................... 4, 7 United States v. Hurt, 795 F.2d 765 (9th Cir. 1986, amended, 808 F.2d 707 (9th Cir., cert. denied, 484 U.S. 816 (1987...................................... 5 Western Oil and Gas Ass n v. EPA, 633 F.2d 803 (9th Cir. 1980............. 6, 8-11, 13, 15 Zambrano v. City of Tustin, 885 F.2d 1473 (9th Cir. 1989............................. 2 Federal Statutes 5 U.S.C. 706.............................................................. 4-5 706(2................................................................... 4 706(2(A................................................................ 4 16 U.S.C. 1536(a(2......................................................... 23 1536(a(3............................................................... 23 1536(a(4............................................................... 24 1536(e-(h.............................................................. 12 1540(a-(b............................................................... 1 1540(g.................................................................. 7 Federal Register 64 Fed. Reg. 24,049-02 (May 5, 1999............................................ 24 69 Fed. Reg. 33,102 (June 14, 2004........................................... 19-25 Court Rules Local Rule 56(a(2........................................................... 25

Page Miscellaneous Black s Law Dictionary (5th ed................................................... 5 Houck, Oliver, Unfinished Stories, 73 U. Colo. L. Rev. 867 (2002...................... 12 MOTIONS FOR SUMMARY JUDGMENT - Page v

INTRODUCTION Defendants National Marine Fisheries Service (NMFS admit their listing is illegal and do not oppose entry of summary judgment against them on that basis but ask this Court to excuse their lawlessness. See Federal Defendants Memorandum in Response to Plaintiffs Motion for Summary Judgment and in Support of Motion to Leave ESA Listing in Place During Remand (NMFS Memo. at 1. 1 Thus, the main parties to this suit do not dispute that NMFS listing of southern Oregon/northern California coho salmon (SONCC coho is unlawful. Instead, the sole question is whether this Court must impose the congressionally mandated remedy of setting aside the unlawful listing. 2 The parties positions are crystallized: NMFS seeks to avoid judicial scrutiny while enforcing its illegal listing under threats of civil and criminal punishment. See 16 U.S.C. 1540(a- (b. On the other hand, Plaintiffs (Granges urge this Court to set aside the unlawful listings. The 1 NMFS states it cannot concede its scientific conclusion reached in 1997 was wrong. NMFS Memo. at 1. Of course, NMFS scientific findings are not challenged in this case. Instead, the Granges challenge only whether NMFS listing action complies with its Endangered Species Act (ESA authority. Whether hatchery salmon should be treated the same as naturally spawning salmon under the ESA is a policy question to be decided by Congress. However, as it is currently written, the ESA affords no basis for treating differently members of the same species in the same species population. 2 Defendant-Intervenors Waterwatch of Oregon, et al. (Environmentalists and Yurok Tribe (Tribe, seek to re-litigate this issue on grounds this Court already decided in Alsea Valley Alliance v. Evans, 161 F. Supp. 2d 1154 (D. Or. 2001. Indeed, the Environmentalists claim the Ninth Circuit overruled Alsea. Defendant-Intervenors Memorandum in Support of Cross Motion for Summary Judgment and in Response to Plaintiffs Motion for Summary Judgment (Environmentalists Memo. at 6; but see Exhibit A (Notice of Supplemental Authority, filed Feb. 22, 2002, in Oregon Natural Resources Council v. Alsea Valley Alliance, Case No. 01-36071, Ninth Circuit Court of Appeals; see also Alsea Valley Alliance v. Department of Commerce, 358 F.3d 1181 (9th Cir. 2004 (dismissing appeal, dissolving stay, and reinstating this Court s decision setting aside the unlawful Oregon Coast coho listing. Likewise, the Tribe cites the decision for the proposition that the ESA allows NMFS to provide different levels of protection to different populations of the same species. Defendant-Intervenor Yurok Tribe s Opposition to Plaintiffs Motion for Summary Judgment (Tribe s Memo. at 4. Of course, as did Alsea, because this case involves a single coho population, all members of the population must be treated the same. Beyond these obvious errors, the Environmentalists and the Tribe merely echo NMFS arguments. Accordingly, the Granges will address their arguments only to the extent they merit a response and diverge from NMFS arguments. MOTIONS FOR SUMMARY JUDGMENT - Page 1

Environmentalists claim the Granges are not entitled to the relief they seek and that the Court should instead issue an injunction compelling NMFS to issue a new rule by June 14, 2005. Environmentalists Memo. at 9. 3 Their proposed remedy, however, does not address, let alone redress, the Granges current harm. See Zambrano v. City of Tustin, 885 F.2d 1473, 1477 (9th Cir. 1989 ( [J]ustice delayed is justice denied.. NMFS, the Environmentalists, and the Tribe (collectively, the Opposing Parties all speculate about what may happen in the future, but ultimately conclude a SONCC coho listing is eventually inevitable in some form. But see NMFS Memo. at 2 ( [T]he proposed revised policy and listing determinations are now the subject of extensive notice and comment, and could be changed between now and release of a final rule.. 4 However, for the purposes of this case, the Opposing Parties speculate only in an effort to misdirect the Court from what exists currently an illegal listing, currently enforced, that will be enforced in the future despite being illegal, which is causing present harm. The Opposing Parties wish to avoid the point that this case concerns current circumstances, rather than what will exist when, or if, NMFS eventually concludes its administrative review. 5 3 Of course, the cases the Environmentalists cite for this proposed remedy all involve issues already decided by this Court. See Order Granting Motion to Lift Stay, dated Aug. 26, 2004. 4 Indeed, on the basis of the speculative relisting, NMFS and the Environmentalists actually claim the Alsea-style listing error is harmless. See, e.g., NMFS Memo. at 16. On the contrary, the proper delineation of a species for ESA purposes is hardly inconsequential. Moreover, given the fact NMFS declined to appeal this Court s Alsea decision and instead embarked on a complex administrative review of all its salmon and steelhead listings based on the error found in Alsea indicates NMFS error is hardly of no import. See NMFS Memo. at 2 (describing the detailed review as one involving difficult and complex issues. 5 Three years after it began its review, NMFS now claims it will issue a final decision on June 14, 2005. NMFS Memo. at 16 n.24. However, notably, NMFS admits even that date is subject to change, and that it will issue a final decision on that date unless grounds for an extension apply, in which circumstances it will strive for a new date as it has numerous times in the past three years. Id. Indeed, NMFS strenuously objects to this Court ordering it to publish a final listing decision by June 14, 2005. See Federal Defendants Response to Defendant-Intervenors Cross Motion for Summary Judgment at 1. Clearly, NMFS wishes to keep its options open concerning its ability to publish a final rule later than June 14, 2005. MOTIONS FOR SUMMARY JUDGMENT - Page 2

However, NMFS is on notice that its proposed hatchery policy and relistings also violate the ESA and fail to comply with this Court s Alsea decision. See Exhibit B, 60-Day Notice of Intent to Sue, Oct. 20, 2004. Exhibit B explains in detail that NMFS proposed relisting does not correct the listing error and does not comply with this Court s Alsea decision. Exhibit B also explains that unless NMFS brings its policy and relisting into compliance with the ESA and this Court s decision, a subsequent and separate lawsuit will be brought challenging the policy and listing, and could well result in both the policy and the listing being invalidated and set aside for substantially the same reasons as NMFS Oregon Coast coho listing at issue in Alsea. 6 This Court should not countenance NMFS illegal listing. 7 The listing continues to cause harm to the Granges and impose unnecessary, costly, and unlawful federal regulatory restrictions on not only the Granges but all parties within NMFS regulatory reach citizens, schools, municipalities, counties, and the States of Oregon and California. Because of their ongoing harm, and NMFS concession that the unlawful rule violates the ESA s express requirements, the Granges implore the Court to set aside NMFS illegal listing. 6 The Opposing Parties claim the proposed policy considers artificial propagation in determining which salmon constitute a salmon population and in evaluating population risks, thereby complying with this Court s Alsea decision. See, e.g., Environmentalists Memo. at 4. However, NMFS proposed policy, and thus its proposed listings, clearly fail again to comply with the ESA and this Court s Alsea decision. See Exhibit B. 7 The Environmentalists make an obtuse and confused argument that the SONCC coho listing differs substantially from the Oregon Coast coho listing at issue in Alsea and invite this Court to examine the administrative record in depth, rather than accept NMFS concession that its listing is illegal. Environmentalists Memo. at 8. This Court need do no such thing. Clearly, the fact that NMFS chose to review all of its salmon and steelhead listings in response to this Court s Alsea decision and, here, admits its SONCC coho listing violates the ESA, settles the issue. MOTIONS FOR SUMMARY JUDGMENT - Page 3

ARGUMENT I THIS COURT SHOULD FOLLOW THE ADMINISTRATIVE PROCEDURE ACT S EXPRESS REMEDY OF SETTING ASIDE AN UNLAWFUL ADMINISTRATIVE RULE A. Congress Clearly Intended for Courts to Set Aside Unlawful Agency Rules and Did Not Provide an Exception in the APA The Administrative Procedure Act, 5 U.S.C. 706 (APA, governs judicial review of agency action taken under the ESA. Native Ecosystems Council v. Dombeck, 304 F.3d 886, 901 (9th Cir. 2002. 8 In the APA, Congress stated in the clearest possible terms that a reviewing court faced with a rule that is not in accordance with law shall... hold unlawful and set aside the agency rule. Section 706(2(A; see also Thomas Jefferson University v. Shalala, 512 U.S. 504, 512 (1994 ( The APA... commands reviewing courts to hold unlawful and set aside agency action that is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. (citing 706(2(A. Here, NMFS admits that its rule is not in accordance with the ESA. Thus, under the APA, the Court must set aside NMFS unlawful rule. 9 8 This may be the only legal issue not disputed by any party in this case. However, in addition to governing judicial review of agency action, the APA also contains a provision setting forth the appropriate remedy for unlawful agency action such as that the Granges challenge here. See 5 U.S.C. 706(2(A. Thus, the APA governs judicial review and the remedy afforded. Accordingly, this Court need not, and should not, accept extra-record evidence in order to determine the appropriate remedy for NMFS unlawful rule, because the APA governs that issue. After recognizing that the APA governs judicial review of its unlawful rule, NMFS Memo. at 13, NMFS appears to attempt to deny that 706(2(A of the APA sets forth the appropriate remedy in this case. Id. at 14 ( [O]n the question of what remedy should be afforded Plaintiffs, the Court must weigh the balance of harms, and may receive and consider competent, extra-record evidence on that issue.. Of course, NMFS can only cite to a single, obscure comment in a district court case for this proposition. Id. at n. 20. 9 Attempting to bolster its argument, NMFS addresses the Granges citation to Forest Guardians v. Babbitt, 174 F.3d 1178 (10th Cir. 1999, by apparently attempting to mislead the Court, asserting the APA command shall applies only to compel agency action unlawfully withheld under 706(1, but does not apply to 706(2. NMFS Memo. at 17 n. 27. However, the APA s language speaks for itself and, according to the well-understood rules of statutory construction, the principle for which the Granges cite Forest Guardians clearly remains valid. MOTIONS FOR SUMMARY JUDGMENT - Page 4

In construing a statute, this Court should first look to the plain meaning of the language in question. United States v. Hurt, 795 F.2d 765, 770 (9th Cir. 1986, amended, 808 F.2d 707 (9th Cir., cert. denied, 484 U.S. 816 (1987. The Ninth Circuit defines plain meaning as the ordinary or natural meaning. Bonnichsen v. United States, 357 F.3d 962, 972-73 (9th Cir. 2004. If the language is unambiguous, its plain meaning controls unless Congress has clearly expressed a contrary legislative intent. Hurt, 795 F.2d at 770. Congress use of the phrase shall... set aside is unambiguous. 10 Shall makes a provision mandatory, and the rules of statutory construction presume that Congress used the term in its ordinary sense unless there is clear evidence to the contrary. Firebaugh Canal Co. v. United States, 203 F.3d 568, 574 (9th Cir. 2000 (citing Bennett v. Spear, 520 U.S. 154 (1997. Black s Law Dictionary defines set aside as to reverse, vacate, cancel, annul, or revoke a judgment, order, etc. Black s Law Dictionary (5th ed. at 1230 (emphasis added. Black s likewise defines vacate, to mean to annul; to set aside; to cancel or rescind. Id. (emphasis added. To set aside means to vacate. No other meaning is apparent. Shall set aside thus means shall vacate. 11 The Ninth Circuit has consistently recognized the congressionally-mandated remedy of setting aside an invalid rule. Bonnichsen, 357 F.3d at 972, 977 ( the APA... instructs courts to hold unlawful and set aside agency action, findings, and conclusions found to be... arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.... We must set aside the Secretary s decision if it was arbitrary or capricious (citation omitted; Nat l Ass n of Home Builders v. Norton, 340 F.3d 835, 841 (9th Cir. 2003 ( Under 706, we must set aside agency actions that are arbitrary, capricious, an abuse of discretion or otherwise not in accordance with 10 NMFS goes so far as to actually argue that the APA does not rigidly mandate setting aside invalid rules. NMFS Memo. at 17. Yet, the APA s command is clear and not subject to dispute, despite the fact some courts may apply an exception to the APA s strict language without congressional authorization. 11 This simple and basic legal maxim of statutory interpretation conflicts with NMFS assertion that [t]he Ninth Circuit has repeatedly recognized that the APA s direction that courts shall set aside rules found to be artbitrary and capricious is not absolute. NMFS Memo. at 17 (citations omitted. MOTIONS FOR SUMMARY JUDGMENT - Page 5

law. ; Anderson v. Evans, 350 F.3d 815, 843-44 (9th Cir. 2003 ( Having concluded that the... issuance by NOAA of a gray whale quota... violates federal law... we must now set aside NOAA s approval.. Moreover, the Supreme Court also recognizes clearly that unlawful agency rules must be set aside. Federal Election Commission v. Akins, 524 U.S. 11, 25 (1998 (Breyer, J. ( If a reviewing court agrees that the agency misinterpreted the law, it will set aside the agency s action and remand the case. ; see also Securities and Exchange Commission v. Chenery Corp., 318 U.S. 80, 94 (1943 ( [A]n order may not stand if the agency has misconceived the law.. Thus, Congress has directed, and the Supreme Court and Ninth Circuit have recognized, that when a court finds that an agency has promulgated an unlawful rule, it shall... set aside the unlawful rule. Leaving the admittedly illegal rule in place pending a revised rulemaking would simply fail to abide by Congress clear direction placed in the APA. B. Important Policy Concerns Should Counsel This Court Not to Apply a Judicially-Created Exception to Congress Clear Mandate Where Congress Has Not Authorized Departure from Its Express Command The Opposing Parties assert that this Court should apply a judicially-created exception to Congress APA-mandated remedy of setting aside unlawful agency rules. See, e.g., NMFS Memo. at 17-20. 12 This Court should not accept the Opposing Parties invitation because the unauthorized exception turns Congress express APA remedy on its head. Indeed, the Opposing Parties advocate urgently on behalf of the exception, in part, because one can always argue that disruptive consequences may occur when an illegal rule is promulgated, relied upon unlawfully, then invalidated and set aside. Yet, such an argument improperly shifts the burden to plaintiffs to show there would never be any disruptive consequences in order to obtain what should be the automatic remedy of congressionally-mandated vacatur. 12 NMFS relies, in part, on Western Oil and Gas Ass n v. EPA, 633 F.2d 803, 813 (9th Cir. 1980, which created a two-part exception for setting aside agency rules, based on a finding of unusual circumstances resulting from (1 thwarting in an unnecessary way operation of the [statute] which (2 leads to undesirable consequences. MOTIONS FOR SUMMARY JUDGMENT - Page 6

Importantly, from a public policy perspective, by requiring courts to set aside illegal rules, Congress provided a crucial check and balance necessary to counteract the significant power that federal agencies exert through rulemaking. If courts fail to set aside unlawful rules, they deny plaintiffs any effective remedy. Under the exception the Opposing Parties advocate, NMFS would effectively insulate itself from challenge because Plaintiffs would have no incentive to spend the significant resources and time necessary to challenge an unlawful rulemaking. Indeed, NMFS arrogantly asserts in this case that [the Granges] are not entitled to the relief they seek here. NMFS Memo. at 1. Clearly, the Opposing Parties argument would nullify a significant portion of citizen suits challenging unlawful agency action, suit that Congress found essential and authorized in the ESA for the specific purpose of policing unlawful agency actions. See 16 U.S.C. 1540(g. Quite simply, the APA s congressionally-mandated remedy of vacatur plays an essential role in Congress structure of judicial oversight of agency action. See Western Oil and Gas Ass n, 633 F.2d at 812-13 ( This is a reasonable corollary of... the limited scope of judicial review of agency action.. Our constitutional structure, including the separation of powers doctrine, forbids the judicial branch from substituting its judgment for that of the executive branch agency. Safari Aviation, Inc. v. Garvey, 300 F.3d 1144, 1150 (9th Cir. 2002. The APA standard of review is highly deferential to agency decisionmaking. Ninilchik Traditional Council v. United States, 227 F.3d 1186, 1193 (9th Cir. 2000; see also NMFS Memo. at 13 ( The standard of review under the APA is highly deferential, and presumes agency action to be valid. (citations omitted. In reality, this deference makes it quite difficult to prove an agency s rulemaking is arbitrary, capricious, or not in accordance with law. Thomas Jefferson University, 512 U.S. at 512 ( [T]he agency s interpretation must be given controlling weight unless it is plainly erroneous or inconsistent with the regulation. (citation omitted. Congress counterbalanced Plaintiffs heavy burden by providing the definitive remedy of setting aside agency rules proven to be unlawful. Congress intended this counterbalance to provide a strong incentive for agencies to devote the necessary resources to promulgate rules that comply MOTIONS FOR SUMMARY JUDGMENT - Page 7

with the law the first time. If NMFS were to believe, as it apparently does already, that courts will remand without vacatur, its incentive to promulgate a well-reasoned and legally valid rule is greatly diminished because the agency knows it will get a second, or multiple, chance. Congress was clear in its APA mandate that a reviewing court shall... set aside an unlawful rule. Nonetheless, the Opposing Parties advocate on behalf of a rule that would allow NMFS to, in essence, (1 list a species on any basis, (2 defend any challenge with a biologist s simple declaration, (3 keep the listing in place during remand, and (4 repeat as needed. However, once a court finds a rule is illegal, there should be no free passes or do-overs. Accordingly, this Court must set aside the illegal listing. II EVEN ASSUMING FOR SAKE OF ARGUMENT THAT A JUDICIALLY-CREATED EXCEPTION TO CONGRESS EXPRESS REMEDY IS PERMISSIBLE AND, ASSUMING THIS COURT CHOOSES TO APPLY THE EXCEPTION, THIS COURT IS BOUND BY THE EXCEPTION UTILIZED BY THE NINTH CIRCUIT COURT OF APPEALS A. To the Extent This Court Applies a Judicially-Created Exception in This Case, the Test Utilized by the Ninth Circuit Court of Appeals Is Controlling To the extent the Ninth Circuit recognizes an exception to Congress mandatory remedy of setting aside an unlawful rule, it consists of a two-part test, requiring unusual circumstances resulting from (1 thwarting in an unnecessary way the operation of the [statute] which (2 leads to undesirable consequences. Western Oil and Gas, 633 F.2d at 813. Most importantly, it is crucial that this Court is cognizant of the posture of the issues the Ninth Circuit addressed. In particular, Western Oil and Gas involved a violation of the APA and the notice and comment procedures in 553(b it did not involve a violation of the underlying substantive statute. Id. at 810-12. Moreover, the Ninth Circuit noted the plaintiffs did not seek to invalidate the rules at issue: [Western Oil and Gas]... suggests, not that the existing designations be declared invalid, but rather that the entire process of preparing the designations be repeated strictly in accordance with state and federal procedure, and that the EPA be ordered MOTIONS FOR SUMMARY JUDGMENT - Page 8

Id. at 812. to substitute the resulting new designations for the present ones when the process is complete. The Ninth Circuit held the Environmental Protection Agency (EPA failed to comply with the APA s notice and comment requirements. Id. at 812. The court confirmed the rule that an agency s failure to comply with the law invalidates a regulation. Id. at 813. Nonetheless, the court left the unlawful rule in place because of unusual circumstances. Id. According to the court, vacating the unlawful rule in Western Oil and Gas would have led to the unusual consequences of thwarting in an unnecessary way the operation of the Clean Air Act, resulting in significant undesirable consequences. Id. 13 Most importantly, the court weighed those factors against the fact the EPA had committed merely a procedural violation in promulgating the air quality rule. Id. In sum, the court made it clear that it was taking the unusual step of maintaining the status quo pending the agency s compliance with notice and comment procedures because of the dire consequences which might follow from invalidation. Alaniz v. Office of Personnel Management, 728 F.2d 1460, 1469 (Fed. Cir. 1984. 14 Thus, the Ninth Circuit s application of the exception implicates clearly that only when a rule suffers a mere procedural defect do the unusual circumstances exist that vacating the unlawful rule would thwart 13 NMFS asserts confidently that [i]f ever a case presented unusual circumstances, this is such a case, in light of the unique administrative and procedural history leading up to this point. NMFS Memo. at 1. To the contrary, a unique administrative and procedural history is irrelevant to this determination. The unusual circumstances to which the Ninth Circuit refers do not occur as a result of NMFS procedural maneuvering within the agency or within the courtroom. Instead, the unusual circumstances refer to those that would occur subsequent to a court s decision and would thwart unnecessarily the operation of a federal statute, resulting in undesirable consequences. NMFS procedural wrangling is not a factor in the equation. 14 Of course, this case is further distinguished from Western Oil and Gas in that NMFS task is not necessarily one of prospective compliance or pending retroactive validation by virtue of merely repeating the process and then substituting the new rule for the old. Instead, NMFS substantive listing error and misapplication of the ESA concerning what constitutes a species population and how NMFS may evaluate the population for ESA listing purposes is such that, when corrected and the ESA is properly applied, NMFS listing should appear substantially different, if it continues to exist at all. MOTIONS FOR SUMMARY JUDGMENT - Page 9

in an unnecessary way (because the same substantive rule will exist after remand as it did initially the operation of the statute, resulting in undesirable consequences (for example, in the ESA context, the likely extinction of a species. Indeed, because the Plaintiffs complained only of procedural violations, the Ninth Circuit concluded, [w]e believe that this remedy best accounts for the injury suffered by petitioners. 633 F.2d at 813. The Ninth Circuit s reasoning is quite simple, as the court explains: The general rule [is] that [1] insubstantial errors in an administrative proceeding that [2] prejudice no one do not require administrative decisions to be set aside. County of Del Norte v. United States, 732 F.2d 1462, 1467 (9th Cir. 1984 (emphasis added. Nothing in the APA indicates such an exception is permitted. But even assuming, for argument s sake, that a judicially created exception is permissible, Western Oil and Gas allows divergence from the congressionally-required remedy only in the unusual case where the consequences of setting aside the unlawful rule are enormous, but the violation to be remedied is entirely procedural and does not involve the underlying substantive statute. Western Oil and Gas, 633 F.2d at 812-13; accord Home Builders Ass n of Northern California v. United States Fish & Wildlife Service, 268 F. Supp. 2d 1197, 1238 (E.D. Cal. 2003 (setting aside the unlawful critical habitat designation for the Alameda whipsnake, stating: [T]he court finds that the errors by the Service in this case are much more serious than the violations of the prior notice and comment requirements that were found in Western Oil and Gas.. The Ninth Circuit applied the Western Oil and Gas reasoning in the context of the ESA in Idaho Farm Bureau v. Babbitt, 58 F.3d 1392 (9th Cir. 1995. In that case, the Fish and Wildlife Service promulgated a rule listing a snail species as endangered. Id. at 1396. The Ninth Circuit affirmed that the Service had committed procedural errors in promulgating the rule, but did not vacate the unlawful rule because of the potential extinction of the species. Id. at 1405; see also id. at 1395 ( the species has been found only in a narrow band of thermal springs and seeps along a 5.28 mile stretch of a river and a tributary in southwest Idaho.. Importantly, the Ninth Circuit MOTIONS FOR SUMMARY JUDGMENT - Page 10

stated the issue as: Should the rule listing the Springs Snail be set aside due to procedural violations? Id. at 1401. Likewise, the court stated: First we determine whether [the Fish and Wildlife Service] violated the APA notice and comment provisions by failing to make the provisional [] report available to the public before the close of the final comment period. Id. at 1402. The court balanced the procedural violations with the unique and dire circumstances the snail faced: No one disputes that the spring flow in the only springs known to constitute Springs Snail habitat has greatly reduced. The record indicates that Indian Bathtub, one of two original springs in which the Springs Snail was found, is completely dry. Id. at 1405. As a result of the species dire consequences as opposed to the mere procedural notice and comment violation, the court kept the endangered species listing in place while the agency corrected the procedural deficiency. Idaho Farm Bureau highlights how the Ninth Circuit applies the Western Oil and Gas exception in the ESA context, and why this case does not fit the exception. First, the violations identified in both Western Oil and Gas and Idaho Farm Bureau were entirely procedural. In both cases, the agencies merely violated the APA s notice and comment requirements. Western Oil and Gas, 633 F.2d at 812-13; Idaho Farm Bureau, 58 F.3d at 1401-02. On the other hand, this case addresses a serious substantive violation of the underlying statute: the failure to abide by the core ESA component of evaluating for listing and listing only a species, subspecies, or distinct population segment of a species. Accord Home Builders Ass n of Northern California, 268 F. Supp. 2d at 1237-38 ( The court is unwilling to rely on the reasoning in Idaho Farm Bureau in the present case, finding that it does not involve such a dire situation.. Second, and equally important, enormous disruptive consequences would have resulted from vacating the procedurally deficient rule in Idaho Farm Bureau. Foremost, the snail was listed as an endangered species, in danger of extinction. 58 F.3d at 1395 ( the Springs Snail was known to exist only in two springs in the Bruneau River area ; cf. Natural Resources Defense Council v. United States Department of Interior, 275 F. Supp. 2d 1136, 1151-52 (C.D. Cal. 2002 (leaving in place an MOTIONS FOR SUMMARY JUDGMENT - Page 11

unlawful critical habitat designation in part based on the loss of 90-97 percent of the species habitat. This is a critical point because this case does not concern the listing of an endangered species on the verge of extinction. 15 Instead, NMFS listed the SONCC coho as merely a threatened species and, by many accounts, it is currently thriving. See infra, pages 19-20. This is an important distinction as noted by this Court in deciding whether to set aside virtually identical Oregon Coast coho listing in a similar factual setting: [I]n [Idaho Farm Bureau] the Ninth Circuit did tell us that when equity demands, a regulation can be left in place while an agency follows correct procedures. The word they used there was necessary procedures. But the facts are a lot different in that case, the Idaho case, the concern was for the potential extinction of an animal species. And the circuit commented that no one disputes that the spring flow in the only springs known to constitute spring snail habitat has been greatly reduced. And that the record indicated that Indian Bathtub, one of the two original springs in which a spring snail was found, is completely dry. It also commented on the unnecessary wasting of hundreds of thousands of dollars of government money. But the factual situation is different here. There is a different prospect of potential extinction. The coho faces a better prospect by far, and at least according to some of the material received by the court are thriving. Alsea Valley Alliance v. Evans, No. 99-6265-HO, Partial Transcript of Proceedings, at 3:3-22 (attached as Exhibit C. B. The Test on Which NMFS Relies Carries No Weight in This Court and Should Be Disregarded Because It Departs from the Judicially-Created Exception Utilized by the Ninth Circuit Attempting to avoid the Ninth Circuit s reasoning in Western Oil and Gas and Idaho Farm Bureau, which applied the judicially-created exception only to rules containing procedural defects, 15 NMFS and the Environmentalists cite Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978, attaching great importance to the phrase institutionalized caution, and provide the Court the story of the darter versus the dam, in an effort to argue that Congress provided endangered species the highest priorities. See, e.g., NMFS Memo. at 21. Of course, the parties fail to tell the rest of the story. After the darter stopped the dam, Congress immediately amended the ESA to include a provision which would allow certain actions to be exempted from the ESA (the God Squad provision, 16 U.S.C. 1536(e-(h, and thereafter a separate bill to complete the dam in spite of the ESA and the darter passed both houses of Congress and was signed by President Carter. See Oliver Houck, Unfinished Stories, 73 U. Colo. L. Rev. 867, 921-42 (2002. Although the Congress in 1973 might have had high-minded aspirations concerning species protection, five years later Congress views were more realistic. MOTIONS FOR SUMMARY JUDGMENT - Page 12

NMFS cites numerous tests from courts other than the Ninth Circuit. NMFS Memo. at 18. 16 NMFS cites these other cases, in part, for the proposition that whether a rule is invalid based on substantive as opposed to procedural errors has little bearing on whether the rule should be set aside. Id. 17 NMFS finally settles on a test it prefers the Court apply in this case, not from the Ninth Circuit or even the D.C. Circuit, 18 but from an as yet unpublished decision of the District Court for the Eastern District of California, applying a hybrid seven-part test collected from various circuit and district courts nationwide. NMFS Memo. at 20 (citing Modesto Irrigation District v. Evans, No. Civ. F-02-6553 OWW DLB (E.D. Cal. May 12, 2004. Of course, this Court is bound only by decisions from the Ninth Circuit, to the extent they apply to this case and is not bound by decisions in other circuits. See Western Oil and Gas, 633 F.2d at 808. Neither is this Court bound by decisions in district courts in other states attempting to interpret, however ineptly, the Ninth Circuit s Western Oil and Gas and Idaho Farm Bureau decisions. Indeed, it appears an unauthorized, judicially-created exception to Congress expressly mandated APA remedy is not enough, from NMFS standpoint, to save its unlawful rule from being set aside. In addition, NMFS argues in favor of an activist stance undertaken by certain courts 16 Conspicuously absent from NMFS discussion, of course, is a case from this Court in which the Court set aside the virtually identical listing of Oregon Coast coho, which suffered from the same substantive flaw at issue in this case. Notably, the Opposing Parties do not claim, nor could they, that Oregon Coast coho have gone extinct since the Ninth Circuit reinstated this Court s opinion setting aside the listing, nor do they even allege Oregon Coast coho have suffered absent the listing. 17 Of course, despite the fact NMFS disparages the procedural versus substantive distinction, the fact remains that the only two relevant cases in the Ninth Circuit, Western Oil and Gas and Idaho Farm Bureau, left in place rules suffering only from procedural errors and left them in place largely on that basis. No good reason exists for the court to look at cases outside of the Ninth Circuit court which, at best, constitute only mildly persuasive decisions. 18 Though not always consistent, courts in the D.C. Circuit have articulated various tests for deciding whether to vacate an invalid rule. Compare International Union, United Mine Workers of America v. Federal Mine Safety and Health Administration, 920 F.2d 960, 967 (D.C. Cir. 1990 (advocating a two-part test with Endangered Species Committee v. Babbitt, 852 F. Supp. 32, 41 (D.D.C. 1994 (advocating a four-part test. MOTIONS FOR SUMMARY JUDGMENT - Page 13

expanding the exception even beyond that employed by the Ninth Circuit. 19 Extending to this Court the invitation to legislate, NMFS cites a case from the District of Arizona in which that court stated: Although some of these cases involve remand where the errors were merely procedural, nothing in their language or rationale limits their application to procedural errors. NMFS Memo. at 18 n. 28 (quoting Nat l Ass n of Home Builders v. Norton, No. Civ. 00-0903-PHX-SRB (June 28, 2004. In particular, NMFS relies on the Modesto case, which, without citing to a Ninth Circuit decision explicitly holding to the contrary itself, states only: Plaintiffs, however, fail themselves to cite a case in which a court explicitly states that rules with substantive errors cannot remain in place pending remand and review by the agency. Modesto Irrigation District, at 47:19-22 (Attachment 1 to NMFS Memo.. These courts take the judicially-created exception to Congress APA mandate beyond even the Ninth Circuit s exception, in essence legislating where they find no barrier to doing so. This Court should refuse NMFS invitation to follow these rogue decisions and, instead, follow Congress APA command or, at the very least, remain within the Ninth Circuit s judicially-created exception to that command. 19 Oddly, NMFS cites Idaho Farm Bureau as a case in which the Ninth Circuit rejected a per se rule of vacatur for substantive error. NMFS states: Other courts, including the Ninth Circuit, have also expressly declined to recognize a bright-line rule barring the exercise of equitable discretion in cases involving actions taken under the ESA. NMFS Memo. at 19 (emphasis added. For this erroneous proposition, NMFS cites Idaho Farm Bureau, 58 F.3d at 1444-45, and provides the parenthetical quotation above, purportedly from that case. Id. However, Idaho Farm Bureau does not extend past page 1406 of the 58 th volume of the Federal Reporter. Most importantly, however, neither Idaho Farm Bureau, nor any other cases in the Ninth Circuit or any case in other circuit court of appeals, contain that language. Clearly, then, NMFS is completely wrong the Ninth Circuit has not rejected a bright line ruling barring vacatur of unlawful agency rules suffering substantive defects. Indeed, as the Granges point out, the two most relevant Ninth Circuit cases to address the issue have relied largely on just such an absence of substantive error to leave the unlawful listing in place. MOTIONS FOR SUMMARY JUDGMENT - Page 14

C. This Court Need Not Accept NMFS Invitation to Avoid Ninth Circuit Precedent and Apply the Modesto Decision to This Case This Court should decline NMFS invitation to adopt the Eastern District of California s test created in the Modesto decision for several reasons. Obviously, the Modesto decision does not constitute mandatory precedent in this Court. However, beyond that fact, the Modesto decision fails to constitute even persuasive precedent due to its own internal contradictions. The Modesto decision notes the controlling Ninth Circuit precedent but then, rather than follow those cases, develops its own test, which leads to a decision that is, quite simply, wrong concerning the issue of vacatur. First, the court notes accurately, [t]he Ninth Circuit here distinguishes between those decision [sic] to be set aside because of (1 procedural defect and (2 substantive defect, i.e., not in accordance with law. Modesto at 45:17-20 (Attachment 1 to NMFS Memo.. The court also explains accurately the limited nature of the judicially-created exception the Ninth Circuit applied in Idaho Farm Bureau: The general rule [is] that [1] insubstantial errors in an administrative proceeding that [2] prejudice no one do not require administrative decisions to be set aside. Id. at 45:28-46:4 (quoting County of Del Norte v. United States, 732 F.2d at 1467. Further, the court describes accurately the Western Oil and Gas and Idaho Farm Bureau cases: In these [Ninth Circuit] cases, the remand involves the re-enactment of a procedural process, like deliberation or notice and comment, which was neglected previously. Procedural oversights alone, however, are not enough to prevent the invalidation of an agency s action. Id. at 49:12-16. However, rather than apply the Ninth Circuit s narrow and straightforward two-part test, the Eastern District of California instead unnecessarily confused the issue by embarking upon a survey of decisions from other circuits and district courts. Id. at 48:2-49:8 (citing cases from the D.C. Circuit, First Circuit, Fifth Circuit, the Eastern District of California, the District of Columbia District Court, and the Central District of California. As a result, the court developed a list of seven different factors, in which a court somewhere in the country applied at least one, and adopted its own MOTIONS FOR SUMMARY JUDGMENT - Page 15

new hybrid test which NMFS advocates here. Id. at 48:5-18. 20 Most importantly, rejecting the procedural versus substantive distinction which it had noted the Ninth Circuit employs, id. at 45:17-20, the court instead cited and relied on cases, not from the Ninth Circuit, but from the D.C. Circuit, the First Circuit, and the Fifth Circuit. Id. at 50:23-52:8. 21 Because the Eastern District of California noted but failed to apply the Ninth Circuit s test utilized in Western Oil and Gas and Idaho Farm Bureau, and instead applied its own hybrid test, the Modesto decision lacks credibility even as persuasive precedent. Moreover, even within the hybrid test the court applied, its decision is distinguishable from this case. For example, the court left the rule in place, in part, based on a substantial threat of irreparable harm to the species. Id. at 52:15. The court based this finding largely on a lengthy declaration of a NMFS biologist, see id. at 55:2, predicting irreparable harm to the species with far more certain language than that predicted in the relatively short declaration of NMFS James Lecky in which, to a large extent, he outlined mere administrative inconveniences. 20 The two-part Ninth Circuit test appears to constitute the second and seventh factors in the court s test, the magnitude of the administrative error and the disruptive consequences of an interim change. Modesto at 48:7, 16. However, it also appears the court ignored these factors, relying instead on its third factor (the possibility the agency will be able to substantiate its decision on remand, its fourth factor (the likelihood that the errors can be mended without altering the order, its fifth factor (equity and public interest considerations, and its sixth factor (potential prejudice to those who will be affected by maintaining the status quo. Id. at 48:9-15, 52:9-17. 21 Inexplicably, the court also cited a Ninth Circuit case, claiming the Ninth Circuit relied on a D.C. Circuit case to reject the procedural versus substantive distinction. Id. at 51:15-18. However, a reading of that case demonstrates the Ninth Circuit did not reject the procedural versus substantive distinction or even rely on the D.C. Circuit case for rejecting the distinction but, instead, cited the D.C. Circuit case only as part of the background description of the proceedings in yet another D.C. Circuit case. See Pacific Bell v. Pac-West Telecomm., Inc., 325 F.3d 1114, 1122-23 (9th Cir. 2003. Describing only the D.C. Circuit case, Pacific Bell actually states: And significantly, the [D.C. Circuit] court did not vacate the Remand Order, reasoning that many of the petitioners themselves favor bill-and-keep, and there is plainly a nontrivial likelihood that the Commission has authority to elect such a system. As a result, the FCC Remand Order remains in effect pending the FCC s proceedings on remand. Id. (citation omitted. MOTIONS FOR SUMMARY JUDGMENT - Page 16

In addition, the court also made a critical error because it evaluated harm to the species based largely on findings in the administrative record that served as the basis for the unlawful listing. Id. at 52:18-54:17. Finding the rule unlawful, the court erred by then relying on findings in the illegal rule s record to leave it in place during remand. Indeed, the rule s illegality stems from NMFS unlawful designation of the species under consideration for ESA listing purposes, accordingly, the record itself was based on a flawed premise. In other words, had NMFS determined the species status after an evaluation of the entire species population rather than a mere portion, its findings in the record concerning the level of threat the species faced likely should have been different, thereby affecting the court s finding of imminent harm. 22 III TO WHATEVER EXTENT THE COURT DECIDES TO BALANCE THE HARMS OF VACATING THE ILLEGAL RULE, THE BALANCE CLEARLY WEIGHS HEAVILY IN FAVOR OF THE GRANGES A. Given the Opportunity, the Opposing Parties Utterly Fail to Prove Any Harm Will Occur to SONCC Coho Absent the Unlawful Listing 1. The Lecky Declaration Fails to Support NMFS Argument The Lecky declaration falls far short of supporting NMFS argument and, instead, provides a further basis for setting aside the illegal listing. 23 Indeed, whereas NMFS Memo. exaggerates that 22 The court also noted NMFS findings in its status review undertaken as a result of this Court s Alsea decision. Id. at 55:3-57:15. However, for the reasons noted in Exhibit B, those findings are not based on a legal interpretation or application of the ESA and, as a result, explain NMFS failure to update its findings made almost ten years previously in that case. 23 In addition, the Declaration of Glen Spain (Spain Decl., submitted by the Environmentalists, is also particularly useless. Spain, basically a lobbyist, does not describe his educational background, or any pertinent qualifications or expertise concerning the issues in this case. Despite this fact, Spain opines about legal principles in the ESA, the Magnuson-Stevens Sustainable Fisheries Act, and NMFS Klamath BiOp, and speculates about future fishing restrictions imposed under either Act and the alleged harm that would purportedly befall SONCC coho absent the unlawful listing. Spain Decl. 6-9, 12-17. Spain is not qualified to make such statements or reach such speculative conclusions. Moreover, Spain, unapologetically attempts to invoke ESA protections so that his (continued... MOTIONS FOR SUMMARY JUDGMENT - Page 17