Natural Resources Defense Council v. Bernhardt

Opinion

UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

NATURAL RESOURCES DEFENSE Case No. 1:05-cv-01207 LJO-EPG COUNCIL, et al., ORDER REQUESTING Plaintiffs, SUPPLEMENTAL BRIEFING RE MOTION TO DISMISS SEVENTH vs. CLAIM FOR RELIEF.

DAVID BERNHARDT, Acting Secretary, U.S. Department of the Interior, et al., ECF NO. 1381

Defendants.

SAN LUIS & DELTA MENDOTA WATER AUTHORITY, et al.,

Defendant-Intervenors.

ANDERSON-COTTONWOOD IRRIGATION DISTRICT, et al.,

Joined Parties.

Before the Court for decision is Federal Defendants’ motion to dismiss as moot the seventh

claim for relief. ECF No. 1381. For the reasons set forth below, the Court orders supplemental briefing.

The assigned magistrate judge succinctly summarized much of the relevant procedural history:

Plaintiff Natural Resources Defense Council (“NRDC”) [ ] subpoenaed the deposition testimony of two employees of [non-party] National Marine

Fisheries Service (“NMFS”). NMFS is a component of the National Oceanic and Atmospheric Administration (“NOAA”), which is an agency

of the U.S. Department of Commerce (“USDOC”). Plaintiffs are seeking the deposition testimony in connection with their Sixth Claim for Relief,

asserted against Defendants Sacramento River Settlement (“SRS”) Contractors and the U.S. Bureau of Reclamation (“BOR”) for the unlawful

take of endangered Sacramento River winter-run Chinook salmon and threatened Central Valley spring-run Chinook salmon in violation of

Section 9 of the Endangered Species Act (“ESA”). Under the ESA, NMFS is the federal agency charged with overseeing the protection of winter-run and spring-run Chinook salmon. NMFS wrote the ESA-mandated Biological Opinion (“BiOp”) analyzing the effects of the

BOR’s Central Valley Project (“CVP”) operations on Chinook salmon and establishing the reasonable and prudent alternatives (“RPA”) that the BOR

must perform to avoid jeopardizing the survival and recovery of Chinook salmon. The BiOp also establishes the limit of “incidental take” authorized

under the ESA, and requires the BOR to update NMFS periodically on the take caused by CVP operations.

NOAA’s Acting General Counsel [ ] refused to permit the two NMFS

employees to testify and [ ] moved to quash the subpoenas, claiming that the employees cannot be compelled to obey a subpoena contrary to

USDOC’s “Touhy” regulations. NRDC [ ] filed a motion to compel compliance with the subpoenas, arguing that USDOC’s decision to refuse

compliance is improper, and the testimony is permitted under the Federal Rules of Civil Procedure.

***

On March 12, 2018, Plaintiffs filed a Sixth Supplemental Complaint

adding a Seventh Claim for Injunctive Relief seeking an order requiring USDOC and NOAA Acting General Counsel to allow Ms. Rea and Dr.

Danner to testify in compliance with NRDC’s subpoenas. (ECF No. 1187, 6th Supp. Compl.)

On March 13, 2018, Defendants USDOC, Wilbur Ross (in his official

capacity as Secretary of the U.S. Department of Commerce), and Kristin L. Gustafson (in her official capacity as Acting General Counsel of

NOAA) were served with process in this case. (ECF No. 1189.)

On March 26, 2018, Wilbur Ross and Kristen L. Gustafson filed an answer to the Sixth Supplemental Complaint and the newly-added Seventh

claim. (ECF No. 1195.)

On April 6, 2018, USDOC filed a statement regarding the deposition subpoenas. (ECF No. 1199.) The statement provided a detailed

explanation for NOAA’s decision to refuse to permit the deposition testimony of Ms. Rea and Dr. Danner. (See id.) Specifically, USDOC

asserted that NOAA reasonably concluded that: 1) topics of the proposed depositions fell within the ambit of unretained expert or opinion testimony

or sought factual information that was publicly available; and 2) Plaintiffs seek testimony from NMFS on the same subject matter that is currently

under consideration in the on-going consultation on long-term operations of the CVP. (Id. 7-11)

ECF No. 1204 at 1-2, 7-8.

Filed on March 12, 2018 as part of the Sixth Amended Complaint at the behest of the magistrate judge, the Seventh Claim is for “Injunctive

Relief” and seeks a “direct order compelling authorization of testimony.” ECF No. 1187 at 67. It relies on the waiver of sovereign immunity

contained in the APA, 5 U.S.C. § 702, and alleges that pursuant to various cases, including Exxon Shipping Co. v. Dep’t of Interior, 34 F.3d 774 (9th

Cir. 1994), “a party seeking to compel an agency to authorize its employee to comply with a subpoena may seek a direct order and prospective

injunctive relief requiring the responsible agency or agency official to allow the employee to testify.” ECF No. 1187 at ¶ 209. The Seventh

Claim incorporates by reference, id. at ¶ 206, factual allegations located at paragraphs 166 through 175. As explained therein, pursuant to DOC

“housekeeping” regulations, 15 C.F.R. § 15.14(b), DOC officials refused to permit Plaintiffs to take the noticed depositions of Maria Rea, in her

official capacity as Assistant Regional Administrator at the NMFS California Central Valley Area Office, and Dr. Eric Danner, in his official

capacity as fisheries ecologist at the NMFS Southwest Fisheries Science Center. Plaintiffs sought their testimony in Sacramento, California on

topics pertaining Plaintiffs’ Sixth Claim for Relief brought under the [ESA] against [BOR] and the [SRS Contractors], which alleges “the

Bureau’s excessive releases, and the SRS Contractors’ diversions, of water during the temperature management season in 2014 and 2015 caused

massive take of winter-run and spring-run Chinook.” Although the factual allegations relevant to the Seventh Claim mention that DOC refused to

permit the depositions pursuant to internal regulations, nowhere does Seventh Claim seek to challenge the DOC’s internal decision as

“arbitrary” or “capricious” under the APA. Rather, the claim seeks relief based upon the allegation that the refusal “is contrary to federal law and

the federal rules of civil procedure.”

ECF No. 1244 at 2-3.

Plaintiffs filings confirm that they did not intend to bring the seventh claim “under the APA.”

ECF No. 1203 at 1-2. Specifically, Plaintiffs intended to allege only “that Section 702 of the APA

waives the Department’s sovereign immunity against [Plaintiffs’] claim for prospective injunctive

relief.” Id. at 2. In particular, Plaintiffs argued that “whereas Section 702 waives sovereign immunity for

all non-monetary claims against federal agencies, the APA’s other procedures and requirements do not

apply to such non-APA claims for injunctive relief.” Id. (citing Navajo Nation v. Dep’t of the Interior,

876 F.3d 1144, 1168, 1171-72 (9th Cir. 2017)).

On April 20, 2018, the assigned magistrate judge issued an order denying DOC’s motion to On May 18, 2018, the Court issued an order indicating formally its intent to treat the April 20,

2018 Order as findings and recommendations (“F&Rs”), because adopting the F&Rs would either

dispose of entirely or moot in part or in full the seventh claim for relief. ECF No. 1239. The Court did

not determine definitively whether its decision on the F&Rs would result in disposition or mootness.

The Court then found that the F&Rs applied the appropriate standard and reached the appropriate

resolution. Pertinent to the pending motion, the Court reviewed the relevant authorities, which it quotes

here at length for the sake of expedience:

The F&Rs properly apply Exxon, which plainly held that “district courts should apply the federal rules of discovery when deciding on discovery

requests made against government agencies, whether or not the United States is a party to the underlying action.” 34 F.3d at 780. Exxon

concerned a collateral complaint brought by Exxon against five federal agencies and their employees seeking to compel discovery requested as

part of its defense in the underlying damages action arising out of the Exxon Valdez oil spill. 34 F.3d at 775. The agencies instructed eight

federal employees not to submit to deposition and restricted the testimony of two others. Id. Exxon contended that these decisions violated the

Federal Housekeeping Statute, 5 U.S.C. § 301, and the APA, 5 U.S.C. § 706(2)(A). Id. The district court found that § 301 authorized the agencies

actions and that the actions were not arbitrary and capricious under the APA. Id.

The Ninth Circuit reversed, beginning its analysis with an explanation of

why United States ex. rel. Touhy v. Ragen, 340 U.S. 462 (1951), did not support the district court’s conclusion. The Ninth Circuit explained that in

Touhy, the Supreme Court held “that an FBI agent could not be held in contempt for refusing to obey a subpoena duces tecum when the Attorney

General, acting pursuant to valid federal regulations governing the release of official documents, had ordered him to refuse to comply.” Exxon, 34

F.3d at 776 (citing Touhy, 340 U.S. at 469). Touhy specifically left open the question of whether an agency head had the power to withhold

evidence from a court without a specific claim of privilege. Touhy, 340 U.S. at 467; see also In re Recalcitrant Witness Richard Boeh v. Daryl

Gates, 25 F.3d 761, 764 & n.4 (9th Cir. 1994) (noting that Touhy did not decide the legality of agency heads’ executive privilege claim).

The Ninth Circuit answered that open question in Exxon, at least with

sufficient clarity to bind lower courts within this Circuit under the circumstances presented here. The Ninth Circuit reasoned that § 301 “does

not, by its own force, authorize federal agency heads to withhold evidence conclusion was based upon an extensive evaluation of § 301’s legislative history, id. at 777-78, as well as reference to prominent commentators on the issue, id. at 778 n.6 (quoting one commentator who reasoned that

“[t]he proposition for which Touhy is often cited—that a government agency may withhold documents or testimony at its discretion—simply is

not good law and hasn’t been since 1958”).

The Ninth Circuit next rejected the government’s argument that principles of sovereign immunity granted to agency heads the authority to determine

whether agency employees may testify. The Ninth Circuit concluded that all of the cases cited for that proposition involved the power of a state

court to subpoena federal officials, which does implicate sovereign immunity. The Ninth Circuit refused to extend that logic to federal courts:

Moreover, under the government’s argument, sovereign immunity

would authorize the executive branch to make conclusive determinations on whether federal employees may comply with a

valid federal court subpoena. Such a broad definition would raise serious separation of powers questions. As the Supreme Court has

said, “judicial control over the evidence in a case cannot be abdicated to the caprice of executive officers.” United States v.

Reynolds, 345 U.S. 1, 9-10 (1953).

Id. at 778. In addition, the Ninth Circuit concluded that “[t]he government’s argument would also violate the fundamental principle that

the public has a right to every man’s evidence.” Id. at 779 (internal quotation and alteration omitted).

Finally, the Ninth Circuit acknowledged the government’s “serious

and legitimate concern that its employee resources not be commandeered into service by private litigants to the detriment of the smooth functioning

of government operations,” but concluded “that district courts can, and will, balance the government’s concerns under the general rules of

discovery.” Id at 779. The Ninth Circuit expanded upon this reasoning by pointing to the numerous protections within the federal rules for litigants

and nonparties:

The Federal Rules of Civil Procedure explicitly provide for limitations on discovery in cases such as this. Rule 26(c) and Rule

45(c)(3) give ample discretion to district courts to quash or modify subpoenas causing “undue burden.” The Federal Rules also afford

nonparties special protection against the time and expense of complying with subpoenas. See Fed. R. Civ. P. 45(c)(3)(A)(ii). In

addition, the Rules can prevent private parties from exploiting government employees as tax-supported pools of experts. See Fed.

R. Civ. P. 45(c)(3)(B)(ii), (iii) (a court may in its discretion disallow the taking of a non-retained expert’s testimony unless the

proponent makes a showing of “substantial need” that “cannot be compensation) (emphasis added). The Rules also recognize and protect privileged information. See Fed. R. Civ. P. 45(c)(3)(A)(iii).

In ruling on discovery requests, Rule 26(b)(2) instructs district courts to consider a number of factors relevant to the government’s

expressed interests. For example, a court may use Rule 26(b) to limit discovery of agency documents or testimony of agency

officials if the desired discovery is relatively unimportant when compared to the government interests in conserving scarce

government resources. See, e.g., Moore v. Armour Pharmaceutical Co., 927 F.2d 1194, 1198 (11th Cir.1991) (considering the

“cumulative impact” of repeated requests for the testimony of Center for Disease Control researchers working on a cure for the

AIDS virus in upholding a decision to quash a subpoena under Rule 45).

Id. at 779- 80 (footnote omitted). In sum, the Ninth Circuit issued a broad

holding:

Section 301 does not create an independent privilege to withhold government information or shield federal employees from valid

subpoenas. Rather, district courts should apply the federal rules of discovery when deciding on discovery requests made against

government agencies, whether or not the United States is a party to the underlying action. Under the balancing test authorized by the

rules, courts can ensure that the unique interests of the government are adequately considered.

Id. at 780 (emphasis added).

Joined/Intervenor Defendants first attempt to distinguish Exxon on the

ground that “the holding in Exxon was decided under a claim that was not brought under the [APA], and the court declined to reach the APA claim

that the ‘agencies’ actions were arbitrary and capricious under § 706(2)(A) until after further district court review, and, if necessary, fact-finding.”

ECF No. 1240 at 2 (quoting Exxon, 34 F.3d at 780). It is true that immediately after the broad holding quoted above regarding the

housekeeping statute, the Ninth Circuit declined to reach Exxon’s APA claim as follows:

Because of our disposition, we decline to reach Exxon’s claim that

the agencies’ actions were arbitrary and capricious under § 706(2)(A) until after further district court review, and, if necessary,

fact-finding. Thus, we remand for the court to exercise its discretion on Exxon’s discovery requests.

The implication of this language is not entirely clear, but a related

discussion in footnote 11 sheds some light on what the Ninth Circuit was The APA also authorizes judicial review of agency action that is “arbitrary, capricious, an abuse of discretion, or otherwise

unlawful.” 5 U.S.C. § 706(2)(A) (1982). Because § 301 provides authority for agency heads to issue rules of procedure in dealing

with requests for information and testimony, an agency head will still be making the decisions on whether to comply with such

requests in the first instance. Thus, review under § 706(2)(A) will be available. However, we acknowledge that collateral APA

proceedings can be costly, time-consuming, inconvenient to litigants, and may “effectively eviscerate [ ]” any right to the

requested testimony. In re Recalcitrant Witness Boeh, 25 F.3d at 770 n. 4 (Norris, J., dissenting) (if the plaintiff had a right to obtain

the witness’ testimony, “he had a right to obtain it when he needed it, which in this case was immediately, when the trial was still

going on”). Therefore, the need for district court review in such instances is all the more compelling.

Exxon, 34 F.3d at 780 n.11. The Court believes this language is best

interpreted as standing for the proposition that, while an APA collateral action may be available, it is not the only way to obtain review of an

agency decision regarding a discovery dispute. As the Ninth Circuit plainly articulated, “district courts should apply the federal rules of

discovery when deciding on discovery requests made against government agencies, whether or not the United States is a party to the underlying

action.” Id. at 780. At bottom, Exxon stands for the proposition that the fact that an APA claim might also be outstanding and worthy of resolution

at some point should not stand in the way of a court resolving a discovery dispute in a timely manner pursuant to the Federal Rules of Civil

Procedure. What the Ninth Circuit did not discuss, and from what the Court can tell has yet to discuss anywhere, is what the consequences of the

Rules-based discovery decision might be for any outstanding APA claim. Might it not moot that claim? Perhaps, but perhaps not. There might be

other aspects to an APA challenge to an agency’s housekeeping determination regarding disclosure of evidence that could survive a Rules-

based discovery decision. If a discovery ruling required only narrow disclosures, for example, a plaintiff might still want to move forward with

a challenge under the APA asserting that the housekeeping determination was arbitrary, capricious or contrary to law. All of this is to say that, while

the dual track suggested by Exxon is somewhat perplexing, it is not nonsensical. In this Circuit, treating a discovery dispute like the one

presented here under the Federal Rules is not only lawful, it is required. The magistrate judge properly concluded that the underlying discovery

dispute could and should be resolved pursuant to the Federal Rules.

ECF No. 1244 at 3-7 (emphasis in original, footnotes omitted)

signaled its intent to find that the rules-based decision issued by the magistrate judge (and adopted by

this Court) moots the seventh cause of action. This is not the case, as indicated by the Court’s own

inquiries quoted above. The questions the Court raised previously represent only some of the relevant

issues. To be more direct, one question that the Court did not raise is this: If the seventh claim for relief

is a valid one over which this Court has subject matter jurisdiction, why would the rules-based decision,

which gave Plaintiffs the relief they requested, not also constitute success on the merits of the APA

claim? The parties do not address this issue in any detail. The Court is cognizant of the fact that Federal

Defendants do argue that the Court lacks subject matter jurisdiction over the seventh claim for relief, a

contention raised seriously for the first time in Federal Defendants’ reply. See ECF No. 1390 at 17-18.

Ninth Circuit authority suggest that where the APA is relied upon only as a waiver of sovereign

immunity, a court must have independent subject matter jurisdiction over the underlying claim (e.g., a

claim premised on a constitutional amendment). See Navajo Nation, 876 F.3d at 1168-69. Although

Federal Defendants have previewed their position(s) on these subjects, the Court believes it will be

beneficial if they clarify and refine their arguments in a supplemental brief. Most critically, Plaintiffs

will then have an opportunity to respond directly to what may amount, at least in part, to a motion to

dismiss the seventh claim for lack of subject matter jurisdiction.

Accordingly, and for the reasons set forth above, supplemental briefing is required. On or before

March 6, 2020, Federal Defendants shall file a supplement to their motion to dismiss no longer that ten

pages in length addressing the issues outlined above and any other justiciability issues. Plaintiffs may

file a response, also no longer than ten pages in length, on or before April 10, 2020.

Dated: January 28, 2020 /s/ Lawrence J. O’Neill _____ UNITED STATES DISTRICT JUDGE