On October 22, 2012, the Ninth Circuit vacated certain federal authorizations for the Ruby Pipeline, a completed natural gas pipeline running from Wyoming to Oregon.  The Court concluded that the U.S. Fish and Wildlife Service’s (Service) Biological Opinion (BiOp) failed to comply with the federal Endangered Species Act (ESA).[1]  The Court also found that the Bureau of Land Management’s (BLM) Record of Decision (ROD) relying on the BiOp was therefore arbitrary and capricious.[2]  The court vacated the BiOp and ROD and remanded each document to its respective agency for further consideration.[3]

The ESA requires federal agencies to ensure that their actions are not likely to jeopardize the continued existence of any listed species or result in the destruction or adverse modification of designated critical habitat.[4]  Ruby Pipeline L.L.C. (Ruby) obtained a Certificate of Public Convenience and Necessity (CPCN) from the Federal Energy Regulatory Commission (FERC) authorizing construction of the pipeline, the transport and sale of natural gas, and certain cost recovery.[5]  Pursuant to the ESA, FERC consulted with the Service on the pipeline’s effects on listed species.[6]  ESA regulations require the Service to formulate an opinion “as to whether the action, taken together with cumulative effects, is likely to jeopardize” listed species.[7]  The Service ultimately issued a BiOp concluding that the pipeline was not likely to jeopardize nine species of endangered fish or their critical habitat.[8]

In making the “no jeopardy” determination, the BiOp relied in part on a “Conservation Action Plan” (CAP) agreed to between Ruby and FERC that included measures for the protection of endangered species.[9]  While the CAP was not included as part of FERC’s “proposed action” (i.e., it was not described as part of the proposed pipeline project), the BiOp considered the CAP measures as “cumulative effects,” or “effects of future [non-Federal] activities… that are reasonably certain to occur . . . .”[10]  Relying on the CAP’s beneficial cumulative effects, the Service determined that the Ruby Pipeline would not likely jeopardize endangered fish, although the CAP was ostensibly a separate effort from the proposed pipeline project.[11]

Under these facts, the panel held that the BiOp’s “no jeopardy” determination was flawed.[12]  According to the court, the CAP did not meet the criteria for background “cumulative effects,” because the CAP measures and the pipeline construction were “unequivocally interrelated.” [13]  For instance, FERC conditioned its approval in the CPCN on Ruby’s fulfillment of the CAP’s obligations; similarly, the conservation measures were dependent upon approval of the project.[14]  The court characterized this as a “quid-pro-quo” relationship that could not be appropriately characterized as a future non-federal cumulative action.[15]

Additionally, the panel held that under these circumstances, a conservation agreement promising to address project impacts on endangered species must be described as part of the proposed project, not merely a background consideration, to be properly considered in a BiOp’s jeopardy determination.[16]  The panel found that only mitigation measures in a proposed project or otherwise incorporated into the Service’s incidental take statement are fully enforceable under the ESA.[17]  Although FERC and BLM may have been able to enforce the CAP under their respective conditions of approval, the court found significant the Service’s special and primary role in protecting endangered species.[18]  The panel found that unless a mitigation agreement is binding under the ESA, the Service cannot effectively enforce the act by reinitiating consultation, levying “strict civil and criminal penalties,” and ESA citizen suits would likewise not be available to encourage enforcement with the measures.[19]  The potential for discretionary enforcement by other federal agencies (whose regulations may require them to balance competing, non-species concerns) was deemed to be inadequate by the Court.[20]

Ultimately, the court vacated the BiOp and ROD, and remanded both documents to the Service and BLM, respectively.[21]  While a revised BiOp is required under the Court’s order, it remains to be seen how the federal agencies will address this decision, especially because the pipeline has already been constructed, and the Court’s opinion did not on its face appear to affect the project’s BLM right-of-way or FERC approval.[22]  The parties have 45 days to seek a rehearing of the court’s decision.[23]