CV 88-1658 LKKCALIFORNIA; CALIFORNIA STRIPEDBASS ASSOCIATION; NATIONALAUDUBON SOCIETY,Plaintiffs-Appellees,v.DAVID G. HOUSTON,Defendant,andFRIANT WATER USERS AUTHORITY,Defendant-Appellant.NATURAL RESOURCES DEFENSECOUNCIL; TROUT UNLIMITED OFCALIFORNIA; BAY INSTITUTE OF SANFRANCISCO; CALIFORNIA NATURALRESOURCES FEDERATION; CALIFORNIASPORTFISHING PROTECTION ALLIANCE;CALIFORNIA TROUT; FRIENDS OF THERIVER; NORTHERN CALIFORNIAGUIDES ASSOCIATION; PACIFIC COASTFEDERATION OF FISHERMEN'SASSOCIATIONS; SAN JOAQUIN RAPTORRESCUE CENTER; SIERRA CLUB;STANISLAUS AUDUBON SOCIETY, No. 97-16043INC.; UNITED ANGLERS OF D.C. No.CALIFORNIA; CALIFORNIA STRIPED CV 88-1658 LKKBASS ASSOCIATION; NATIONALAUDUBON SOCIETY,Plaintiffs-Appellees,v.DAVID G. HOUSTON,Defendant,andMADERA IRRIGATION DISTRICT;CHOWCHILLA WATER DISTRICT,Defendants-Intervenors-Appellants.NATURAL RESOURCES DEFENSECOUNCIL; TROUT UNLIMITED OFCALIFORNIA; BAY INSTITUTE OF SANFRANCISCO; CALIFORNIA NATURALRESOURCES FEDERATION; CALIFORNIASPORTFISHING PROTECTION ALLIANCE;CALIFORNIA TROUT; FRIENDS OF THERIVER; NORTHERN CALIFORNIAGUIDES ASSOCIATION; PACIFIC COASTFEDERATION OF FISHERMEN'SASSOCIATIONS; SAN JOAQUIN RAPTORRESCUE CENTER; SIERRA CLUB;STANISLAUS AUDUBON SOCIETY,INC.; UNITED ANGLERS OF No. 97-16044CALIFORNIA; CALIFORNIA STRIPED D.C. No.BASS ASSOCIATION; NATIONAL CV 88-1658 LKKAUDUBON SOCIETY,Plaintiffs-Appellees,v.DAVID G. HOUSTON,Defendant,andARVIN-EDISON WATER STORAGEDISTRICT; SHAFTER-WASCOIRRIGATION DISTRICT; SOUTHERN SANJOAQUIN MUNICIPAL UTILITYDISTRICT,Defendants-Intervenors-Appellants.NATURAL RESOURCES DEFENSECOUNCIL; TROUT UNLIMITED OFCALIFORNIA; BAY INSTITUTE OF SANFRANCISCO; CALIFORNIA NATURALRESOURCES FEDERATION; CALIFORNIASPORTFISHING PROTECTION ALLIANCE;CALIFORNIA TROUT; FRIENDS OF THERIVER; NORTHERN CALIFORNIAGUIDES ASSOCIATION; PACIFIC COASTFEDERATION OF FISHERMEN'SASSOCIATIONS; SAN JOAQUIN RAPTORRESCUE CENTER; SIERRA CLUB; No. 97-16045STANISLAUS AUDUBON SOCIETY, D.C. No.INC.; UNITED ANGLERS OF CV 88-1658 LKKCALIFORNIA; CALIFORNIA STRIPEDBASS ASSOCIATION; NATIONALAUDUBON SOCIETY,Plaintiffs-Appellees,v.DAVID G. HOUSTON,Defendant,andTULARE IRRIGATION DISTRICT,Defendant-Intervenor-Appellant.NATURAL RESOURCES DEFENSECOUNCIL; TROUT UNLIMITED OFCALIFORNIA; BAY INSTITUTE OF SANFRANCISCO; CALIFORNIA NATURALRESOURCES FEDERATION; CALIFORNIASPORTFISHING PROTECTION ALLIANCE;CALIFORNIA TROUT; FRIENDS OF THERIVER; NORTHERN CALIFORNIAGUIDES ASSOCIATION; PACIFIC COASTFEDERATION OF FISHERMEN'SASSOCIATIONS; SAN JOAQUIN RAPTORRESCUE CENTER; SIERRA CLUB;STANISLAUS AUDUBON SOCIETY,INC.; UNITED ANGLERS OFCALIFORNIA; CALIFORNIA STRIPEDBASS ASSOCIATION; NATIONAL No. 97-16173AUDUBON SOCIETY, D.C. No.Plaintiffs-Appellants, CV 88-1658 LKKv.ROGER PATTERSON, as RegionalDirector of the U.S. Bureau ofReclamation; BRUCE BABBITT;FRIANT WATER USERS AUTHORITY,Defendants-Appellees,andLOWER TULE RIVER IRRIGATIONDISTRICT; PORTERVILLE IRRIGATIONDISTRICT; SAUCELITO IRRIGATIONDISTRICT; STONE CORRAL IRRIGATIONDISTRICT; TEAPOT DOME WATERDISTRICT,Defendants-Intervenors-Appellees.Appeals from the United States District Courtfor the Eastern District of CaliforniaLawrence K. Karlton, District Judge, PresidingArgued and SubmittedDecember 8, 1997--San Francisco, CaliforniaFiled June 24, 1998Before: Otto R. Skopil, Jr., Dorothy W. Nelson, andA. Wallace Tashima, Circuit Judges.Opinion by Judge Tashima
_____________________________COUNSEL Gregory K. Wilkinson, Best, Best & Krieger, LLP, Riverside,California, for defendant-appellant and appellee Friant WaterUsers Authority, and for defendants-intervenors-appellantsLindmore Irrigation District, Lindsay-Strathmore IrrigationDistrict, Terra Bella Irrigation District, Exeter Irrigation Dis-trict, Ivanhoe Irrigation District, Tulare Irrigation District,Lower Tule River Irrigation District, Saucelito Irrigation Dis-trict, Delano-Earlimart Irrigation District, Teapot DomeWater District, Arvin-Edison Water Storage District, SouthernSan Joaquin Municipal Utility District, Shafter-Wasco Irriga-tion District, Porterville Irrigation District and Stone CorralIrrigation District.Philip F. Atkins-Pattenson, Sheppard, Mullin, Richter &Hampton, LLP, San Francisco, California, for plaintiffs-appellees and cross-appellants.Michael Victor Sexton, Minasian, Spruance, Baber, Meith,Soares & Sexton, LLP, Oroville, California, for defendant-intervenor-appellant Orange Cove Irrigation District.Denslow Green, Madera, California, for defendants-appellantsChowchilla Water District and Madera Irrigation District.Lois J. Schiffer, Assistant Attorney General, Robert L. Klar-quist, Department of Justice, Environment & NaturalResources Division, Washington, D.C., for defendants-appellees Roger Patterson and Bruce Babbitt.Daniel E. Lungren, Attorney General of California, CliffordT. Lee and Linus Masouredis, Deputy Attorneys General, SanFrancisco, California, for amici curiae State of California andCalifornia State Water Resources Control Board.
_____________________________OPINION TASHIMA, Circuit Judge:Various irrigation and water districts (Non-federal Defen-dants), that rely on water from the Friant dam, appeal the dis-trict court's summary judgment decision that the Bureau ofReclamation (Bureau or Federal Defendant), violated theEndangered Species Act (ESA) by renewing water contractsprior to completing required endangered species consulta-tions. These defendants also appeal the district court's conclu-sion that Section 8 of the Reclamation Act, 43 U.S.C. S 383,mandates compliance with Section 5937 of the California Fishand Game Code. Various environmental groups led by theNational Resources Defense Council (Plaintiffs), cross-appealthe district court's summary judgment decision that theBureau was not required to comply with National Environ-mental Policy Act (NEPA) and appeal the dismissal of theSection 8/Section 5937 claim as unripe.We affirm the district court's holding that the ESA was vio-lated and its decision to rescind the contracts at issue. Weremand for a determination on the Section 8/Section 5937claim.BACKGROUNDThe Central Valley Project (CVP) is a multi-unit reclama-tion project administered by the Bureau. The Friant dam unitof the CVP was built on the San Joaquin River by the Bureauin the 1940s. Prior to construction of the dam, the San JoaquinRiver met the Sacramento River at the Sacramento-San Joa-quin Delta, where they then flowed out to the Pacific Ocean.Since the time that the dam was completed, the Friant unit hasimpounded the San Joaquin River water behind the Friantdam and diverted the water to surrounding irrigation districts.This impoundment and diversion leaves a dry stretch of SanJoaquin riverbed.In the late 1940s, the Non-federal Defendants1 entered into40-year Friant water service contracts with the government,pursuant to Section 9(e) of the Reclamation Act of 1939, 43U.S.C. S 485h(e). The contracts typically provided that theywould be renewed no later than one year prior to expirationon terms that "shall be agreed upon." In 1956, Congress man-dated that contract holders had a right to renewal "understated terms and conditions mutually agreeable to the parties."43 U.S.C. S 485h-1(1). Contract holders had "a first right . . .to a stated share or quantity of the project's available watersupply . . . ." 43 U.S.C. S 485h-1(4).The first of these contracts, the contract with the OrangeCove Irrigation District (Orange Cove), expired in Februaryof 1989. The Bureau began contract renewal negotiations withOrange Cove in June, 1988, and executed a renewal contractin May, 1989. By 1992, the Bureau had executed 13 addi-tional water contracts. All 14 contracts provided for waterdelivery for a 40-year period under terms substantially similarto those in the previous contracts.In 1992, Congress enacted the Central Valley ProjectImprovement Act (CVPIA), Pub. L. No. 102-575, S 3401 etseq., 1992 U.S.C.C.A.N. (106 Stat.) 4600, 4706, whichrequired the government to perform an environmental impactstatement (EIS) on the Friant unit before it could execute theremaining renewal contracts. The CVPIA also limited thelength of subsequently renewed contracts to 25 years. There-fore, of the 28 Friant water service contracts that were up forrenewal, only the first 14 contracts are at issue.Prior to construction of the Friant dam, the San JoaquinRiver supported a variety of fish species, including the chi-nook salmon. The annual spring floods also fed the surround-ing wetlands with fresh water. After the Friant dam was built,the San Joaquin River terminated at the dam, and water fromthe Sacramento-San Joaquin Delta is exported upstream towater users below the dam through a process of pumping andreverse flows. This situation has adversely affected both wet-lands and river fish, including the winter-run chinook salmon.The salmon, which was listed as threatened in August, 1989,and is now endangered, is under the protective jurisdiction ofthe National Marine Fisheries Service (NMFS). Other listedspecies under the jurisdiction of the Fish and Wildlife Service(FWS) are also located in the Friant Service Area.The Plaintiffs filed this action against the Bureau inDecember, 1988, claiming that the Bureau violated NEPA byrenewing the water contracts without first performing an EIS.The Plaintiffs sought a preliminary injunction against furthercontracts. The district court denied the injunction, but orderedthe parties to include in the remaining contracts a clause thatconditioned the terms on the final outcome of this case. Allthe renewal contracts in this case, except for the Orange Covecontract, contain this provision. The contracts also include aclause, entitled "Compliance with Reclamation Laws," whichpermits minor modifications to the contracts in order to com-ply with federal law. This clause is known as Article 14.The Plaintiffs' amended complaint also alleges violationsof the ESA, section 8 of the Reclamation Act (S 8), and sec-tion 5937 of the California Fish & Game Code (S 5937). TheNon-federal Defendants were permitted to intervene in 1989.There are five district court orders that are now at issue: (1) Order filed April 30, 1992. The district court denied the Defendants' motion to dismiss the S 8/S 5937 claim. See 791 F. Supp. 1425 (E.D. Cal. 1992). (2) Order filed October 12, 1993. The district court denied the Defendants' motion to dismiss the S 8/S 5937 claim as mooted or preempted by the CVPIA. (3) Order filed May 31, 1995. The district court granted the Defendants summary judgment on the NEPA claim, but granted the Plaintiffs summary judgment on the ESA claim. (4) Order filed January 16, 1997. The district court ordered the 14 contracts rescinded. The court concluded that the S 8/S 5937 claim was not ripe. (5) Order filed April 16, 1997. The district court amended the January 16, 1997, judgment and dismissed the Plaintiffs' substantive ESA claim without prejudice.The Non-federal Defendants argue that: (1) the ESA didnot apply to their contracts; (2) but if it did, the ESA was notviolated; (3) but if the ESA was violated, the claim is moot;(4) but if there was an ESA violation that was not mooted, theremedy of contract invalidation was inappropriate. The Non-federal Defendants also argue that the CVPIA preemptsS 5937. The Plaintiffs cross-appeal the grant of summaryjudgment to the Defendants on the NEPA claim and theyappeal the court's conclusion that the S 8/S 5937 claim wasnot ripe. The Bureau is participating in the Plaintiffs' cross-appeal only.2DISCUSSIONI. Endangered Species ActA. OverviewSection 7(a)(2) of the ESA requires all federal agencies "toinsure that any action authorized, funded, or carried out bysuch agency is not likely to jeopardize the continuedexistence" of any endangered or threatened species or resultin the destruction of critical habitats. 16 U.S.C.S 1536(a)(2).If an agency determines that its proposed action "may affect"an endangered or threatened species, the agency must for-mally consult with the relevant Service, the FWS and/or theNMFS, depending on the species that are protected in the areaof the proposed action. See Pacific Rivers Council v. Thomas,30 F.3d 1050, 1054 n.8 (9th Cir. 1995). After the formal con-sultation is completed, the relevant Service will issue a Bio-logical Opinion evaluating the nature and extent of effect onthe threatened or endangered species. If the Biological Opin-ion concludes that the proposed action is likely to jeopardizea protected species, the agency must modify its proposal. Sec-tion 7(d) of the ESA prohibits the "irreversible or irretrievablecommitment of resources" during the consultation process. 16U.S.C. S 1536(d).[1] As the district court observed, the ESA has "explicitsubstantive goal[s] which [are] served by its proceduralrequirements." Order of May 31, 1995 at 20 (citing Thomasv. Peterson, 753 F.2d 754, 763 (9th Cir. 1985)). The districtcourt concluded that the contracts amounted to an"irreversible and irretrievable commitment of resources" andall contracts executed prior to completion of the required con-sultations with the FWS and the NMFS violated S 7(d). Thedistrict court invalidated all of the contracts which had beenexecuted prior to the completion of the required consultations.[2] Judicial review of administrative decisions involvingthe ESA is governed by section 706 of the AdministrativeProcedure Act, 5 U.S.C. S 706. A court may set aside anagency action if it was "arbitrary, capricious, an abuse of dis-cretion, or otherwise not in accordance with law " or if it wasfound to be "without observance of procedure required bylaw." 5 U.S.C. S 706(2)(A),(D); Pyramid Lake Paiute Tribeof Indians v. United States Dep't of the Navy, 898 F.2d 1410,1414 (9th Cir. 1990). The district court's summary judgmentdecision is reviewed de novo. Forsyth v. Humana, Inc., 114F.3d 1467, 1474 (9th Cir.), cert. denied, 118 S. Ct. 559(1997).B. Applicability of the ESA[3] As a threshold question, the Non-federal Defendantsargue that the ESA did not apply to the contract renewalsbecause the renewals were not "agency action. " See 16 U.S.C.S 1536(a)(2). This argument must fail. The term "agencyaction" has been defined broadly. In TVA v. Hill, 437 U.S.153 (1978), the Court stated: One would be hard pressed to find a statutory pro- vision whose terms were any plainer than those in S 7 of the Endangered Species Act. Its very words affirmatively command all federal agencies "to insure that actions authorized, funded, or carried out by them do not jeopardize the continued existence" of an endangered species or "result in the destruction or modification of habitat of such species. . . . " This language admits of no exception.Id. at 173. See also Pacific Rivers, 30 F.3d at 1055("Following the Supreme Court's lead in TVA, we have con-strued `agency action' broadly.") The regulation definingagency action states: Action means all activities or programs of any kind authorized, funded, or carried out, in whole or in part, by Federal agencies. . . . Examples include, but are not limited to: . . . the granting of licenses, con- tracts, leases, easements, rights-of-way, permits or grants in aid.50 C.F.R. S 402.02. Clearly, negotiating and executing con-tracts is "agency action."[4] Orange Cove, the Madera Irrigation District (Madera)and Chowchilla Water District (Chowchilla) contend that theBureau had no discretion to alter the terms of the renewalcontracts, particularly the quantity of water delivered.3 Wherethere is no agency discretion to act, the ESA does not apply.Sierra Club v. Babbitt, 65 F.3d 1502, 1509 (9th Cir. 1995).The federal reclamation laws, which provided the right torenewal, state that the government is to renew the contracts on"mutually agreeable" terms, 43 U.S.C. S 485h-1(1), that waterrights are based on the amount of available project water, 43U.S.C. S 485h-1(4), and that the Secretary of the Interior(Secretary) has the discretion to set rates to cover an appropri-ate share of the operation and maintenance costs, 43 U.S.C.S 485h(e). Clearly, there was some discretion available to theBureau during the negotiation process.[5] Orange Cove points to the opinion of the Solicitor ofthe Interior that the Bureau had no discretion for purposes ofa NEPA analysis. Orange Cove argues that this opinion wasentitled to deference. The opinion, however, only addressesthe applicability of NEPA, not the ESA. Even if this opinionwere relevant, the district court correctly concluded that theSolicitor's opinion was inconsistent with the requirements ofthe ESA. First, the opinion began from the premise that thegovernment did not intend to make any substantial changes inthe renewal contracts. The Solicitor, however, did notconclude that there was no discretion to change the terms ofthe contracts. He wrote: If the Secretary exercises his discretion to make other substantial changes in the contracts at the time of renewal, then analysis must be undertaken to determine whether the exercise of discretion quali- fies for a categorical exclusion from preparation analysis under NEPA. . . . [While there is no discre- tion to alter the quantity of water received . . . the] Secretary has considerable discretion, however, to change other terms of the renewed contracts.The Solicitor concluded that there was no discretion to changethe quantity of water delivered under the contracts becausethe districts have "a first right . . . to a stated share or quantityof the project's available water supply. . . ." (Citing 43 U.S.C.S 485h-1(4)). The Solicitor, however, assumed that the"project's available water supply" included all of the Friantdam water, and he did not address the issue of whether thetotal amount of available project water could be reduced inorder to comply with the ESA or state law. See O'Neill v.United States, 50 F.3d 677, 686 (9th Cir. 1995) (noting thatan agency can deliver less than a contractually agreed uponamount of water in order to comply with subsequentlyenacted federal law). Therefore, even if the original contractsguaranteed the Non-federal Defendants a right to a similarshare of available water in the renewal contracts, the Bureauhad discretion to alter other key terms in the contract, and theBureau may be able to reduce the amount of water availablefor sale if necessary to comply with ESA.C. Procedural Violations of the ESA 1. Failure to Consult with the NMFS[6] Before initiating any agency action in an area that con-tains threatened or endangered species or a critical habitat, theagency must (1) make an independent determination ofwhether its action "may affect" a protected species or habitat,or (2) initiate a formal consultation with the agency that hasjurisdiction over the species. See generally Peterson, 753 F.2dat 763. If an agency determines that an action "may affect"critical species or habitats, formal consultation is mandated.Id.; 50 C.F.R. S 402.14(a). Formal consultation is excusedonly where (1) an agency determines that its action is unlikelyto adversely affect the protected species or habitat, and (2) therelevant Service (FWS or NMFS) concurs with that determi-nation. 50 C.F.R. S 402.14(b); see Pacific Rivers, 30 F.3d at1054, n.8.The NMFS has jurisdiction over the winter-run chinooksalmon, which was listed as a threatened species prior to exe-cution of all but one of the water contracts. The Bureau inde-pendently determined that the renewal contracts andrecommitment of all the Friant dam's water were not likelyadversely to affect the salmon. The Bureau then sought theNMFS' concurrence with that assessment. On November 1,1991, the Director of the NMFS refused to concur in theBureau's opinion that the salmon would not be adverselyaffected. However, the NMFS also stated that formal consul-tation was not required. The Director wrote: While we disagree with the Bureau's determination that renewal of the Friant contracts are not likely to affect the winter-run [chinook salmon] adversely . . . we do not believe that a formal consultation on the Friant contract renewals is necessary. . . . [T]he issue of delta exports is being addressed in our ongoing consultation on the CVP. . . and we believe this will allow us to address the adverse impacts from the activities interrelated to the renewal of the Friant contracts.The Bureau then proceeded to execute the water contractswithout requesting a formal consultation with the NMFS. TheBureau argued that it reasonably relied on the NMFS' deter-mination that a formal consultation was unnecessary.[7] The Non-federal Defendants cite Stop H-3 Ass'n v.Dole, 740 F.2d 1442 (9th Cir. 1984), and Pyramid Lake, 898F.2d 1410, to support their argument that the Bureau's reli-ance on the NMFS opinion was not arbitrary and capricious.These cases, however, do not support the Non-federal Defen-dants' position. Unlike both Stop H-3 and Pyramid Lake, theissue in this case is not whether the Bureau was arbitrary andcapricious in relying on a properly issued Biological Opinion.Instead, the issue is whether the Bureau was arbitrary andcapricious when it relied on the NMFS' view that a consulta-tion was not necessary, despite NMFS' refusal to provide therequired concurrence. By relying on the NMFS in this case,the Bureau did not meet its independent responsibilities underthe ESA.[8] The Bureau had an affirmative duty to ensure that itsactions did not jeopardize endangered species, and the NMFSletter clearly disagreed with the agency's determination of noadverse impact. See 16 U.S.C. S 1536(a)(2); 50 C.F.R.S 402.14. Under those circumstances, regardless of the NMFSposition that a formal consultation was "unnecessary," theBureau had a clear legal obligation to at least request a formalconsultation. See 50 C.F.R. SS 402.13, 402.14. The reasonthat the NMFS gave for stating that a consultation was unnec-essary was not supported by statute or regulation and had norational relationship to the Bureau's independent obligationsto ensure that its proposed actions were not likely adverselyto affect the salmon. The district court did not err in conclud-ing that it was arbitrary and capricious for the Bureau to forgoa formal consultation with the NMFS where the NMFS spe-cifically refused to provide the required concurrence of "noadverse impact." Where the Bureau executed these 40-yearcontracts without first obtaining either the required concur-rence from NMFS that the proposed action was not likely toaffect a threatened species or a properly issued NMFS "nojeopardy" Biological Opinion, the Bureau acted arbitrarilyand capriciously and not in accordance with the law. There-fore, all of these contracts were subject to rescission. 2. Untimely Consultation with the FWS [9] In addition to failing to request and follow through witha required consultation with NMFS, the Bureau also failed tofollow its obligations under law with respect to its consulta-tion with the FWS. The FWS has jurisdiction over severalprotected species in the Friant area, and the Bureau informallyconsulted with the FWS during 1990 and 1991. Formal con-sultation was requested on May 22, 1991. The FWS issued a"no jeopardy" Biological Opinion on October 15, 1991. Tenof the Friant contracts had already been executed by that time.The contracts contained Article 14, which allowed some con-tract modification pursuant to environmental review, and allbut one of the contracts contained a provision modifying theterms dependent on the outcome of this litigation. 4Section 7(d) of the ESA provides: After initiation of consultation required under sub- section (a)(2) of this section, the Federal agency and the permit or license applicant shall not make any irreversible or irretrievable commitment of resources with respect to the agency action which has the effect of foreclosing the formulation or implementa- tion of any reasonable and prudent alternative mea- sures which would not violate subsection (a)(2) of this section.16 U.S.C. S 1536(d); see 50 C.F.R.S 402.09. The districtcourt concluded that the 40-year water contracts constitutedan irreversible and irretrievable commitment of resources andthat the Bureau was not permitted to proceed until FWS foundthat the contracts were not likely to affect a protected species.5See Pacific Rivers, 30 F.3d at 1056 (following discussion ofS 7(a)(2) and S 7(d), court concluded that "timber sales con-stitute per se irreversible and irretrievable commitment ofresources"); Lane County Audubon Soc'y v. Jamison, 958F.2d 290, 295 (9th Cir. 1992).[10] The Non-federal Defendants insist that even if thewater contracts are an irreversible and irretrievable commit-ment of resources, Article 14 prevented the foreclosure of rea-sonable and prudent alternatives and, therefore,S 7(d) was notviolated. We do not think that an agency should be permittedto skirt the procedural requirements of S 7(d) by includingsuch a catchall savings clause in illegally executed contracts.However, even if such a clause could preserve the contracts,Article 14 is inadequate to serve that purpose here because itlimits conservation-based modifications to minor adjustmentsand prohibits an adjustment in the amount of water delivered.Because Article 14 does not permit a reduction in the quantityof water delivered, the reasonable and prudent alternative ofreallocating contracted water from irrigation to conservationis foreclosed. The district court did not err in concluding thatthe Bureau violated S 7(d) when it executed the contractsprior to completing the formal consultation process with theFWS, and the contracts executed prior to the issuance of theFWS Biological Opinion are subject to rescission. 6 3. MootnessThe Non-federal Defendants argue that if the Bureau vio-lated the ESA by executing the water contracts prior to theissuance of the FWS Biological Opinion, this claim becamemoot once a "no jeopardy" biological Opinion was issued onOctober 15, 1991.7 In the May 31, 1991, Order, the districtcourt concluded that the Biological Opinion did not moot theprocedural ESA violations because the issuance of the Biolog-ical Opinion did not provide all the relief that could have beengranted. The district court concluded that an appropriate rem-edy was still available -- contract rescission -- which wouldplace the Plaintiffs in the position they would have been hadthe ESA been complied with before execution of the con-tracts.Mootness is a question of law reviewed de novo. NativeVillage v. Blatchford, 38 F.3d 1505, 1509 (9th Cir. 1994). TheNon-federal Defendants rely on Southern Utah WildernessAlliance v. Smith, 110 F.3d 724 (10th Cir. 1997), as persua-sive authority that the ESA claim was mooted. In SouthernUtah an informal consultation completed after the agencyaction mooted the ESA claim. However, Southern Utah is dis-tinguishable because (1) there was no irreversible and irre-trievable commitment of resources, and (2) the only reliefrequested was the completed consultation.[11] Procedural violations of the ESA are not necessarilymooted by a finding by the FWS that a substantive violationof the ESA had not occurred. The process, which was notobserved here, itself offers valuable protections against therisk of a substantive violation and ensures that environmentalconcerns will be properly factored into the decision-makingprocess as intended by Congress. Also, due to the proceduralviolations here, the Plaintiffs' ability to enjoin the agencyaction while they challenged the validity of the BiologicalOpinion was negated.8[12] Here, if the Biological Opinion had been renderedbefore the contracts were executed, the FWS would have hadmore flexibility to make, and the Bureau to implement, sug-gested modifications to the proposed contracts. See 50 C.F.R.S 402.14(g)(6), (j) (Service's responsibilities include formu-lating "discretionary conservation recommendations, if any,which will assist . . . agency in reducing or eliminating theimpacts it may have on listed species or critical habitats").Even where there is a "no jeopardy" Biological Opinion, theService may make non-binding conservation recommenda-tions. 50 C.F.R. S 402.14(g)(6), (j). The failure to respect theprocess mandated by law cannot be corrected with post-hocassessments of a done deal.D. Remedy of Contract Rescission[13] Where an agency acts arbitrarily or capriciously or notin accordance with the law, the APA states that the court shallset aside the agency action. 5 U.S.C. S 706(2)(A)-(D). Whilethe court had the discretion to preserve the contracts if theprocedural flaw could have been rectified in another way, seeWeinberger v. Romero-Barcelo,
456 U.S. 305, 320
(1982),there is no reason to compel that result here.[14] In Bob Marshall Alliance v. Hodel, 852 F.2d 1223,1230 (9th Cir. 1988), the court stated that "the proper remedyfor substantial procedural violations of NEPA and the ESA isan injunction." In that case, however, the government hadbeen enjoined by the district court from entering into moreleases and the leases that were already entered into were setaside. Also, the agency action at issue did not appear toinvolve an irreversible and irretrievable commitment ofresources. In Forelaws on Board v. Johnson, 743 F.2d 677,685 (9th Cir. 1984), although we refused to issue an injunc-tion, we noted that for NEPA violations, injunctions servedthe purpose of "preserv[ing] the decision makers' opportunityto choose among policy alternatives." Id. Where contractshave already been entered into, the opportunity to "choose"has been eliminated -- all that remains is the limited abilityto make the path chosen as palatable as possible. Therefore,an injunction would not serve any purpose if the contracts arenot invalidated. We conclude that the district court's decisionto rescind the contracts was not an abuse of discretion.E. Unique Issues Related to Particular Contracts 1. Orange CoveOrange Cove is uniquely situated from the rest of the Non-federal Defendants. First, the Orange Cove contract was theonly contract that was executed after the Bureau and the FWShad concurred that the contract was not likely adversely toaffect any protected species. Therefore, for the Orange Covecontract alone, a formal consultation with the FWS was notrequired before contract execution and the ESA was not vio-lated on those grounds.The district court concluded, however, that even though theESA was not violated because of a flawed FWS consultation,the failure to consult with the NMFS before executing theOrange Cove contract resulted in a procedural violation. TheOrange Cove contract, however, was also the only contractexecuted before the winter-run chinook salmon was listed asthreatened in August of 1989. Orange Cove argues thatbecause its contract was executed before the salmon waslisted, the Bureau had no duty to consult with the NMFS, for-mally or informally, under the ESA.The district court, on Orange Cove's motion for reconsider-ation, concluded that until Orange Cove had the contract vali-dated in state court,9 the Bureau had the power and theobligation to withdraw the contract and initiate consultationwith the NMFS after the salmon was listed in August, 1989.Orange Cove argues that the district court improperly decidedthe validation argument because it was not addressed by theparties in their summary judgment briefs. Orange Cove alsoargues that the district court erred as a matter of law.Orange Cove implicitly raised the validation argumentwhen it moved for reconsideration and pointed out to thecourt that its contract was executed prior to the threatenedspecies listing. The Orange Cove contract, on its face, statesthat it is not binding on the United States until it is validatedin state court. Both sides had an opportunity to address thisargument in writing a year before the district court issued itsJanuary 16, 1997, Order.Orange Cove argues that after the contract was executed inMay, 1989, there was no "agency action" that would requirereinitiation of an ESA consultation. However, even though thegovernment was not under a contractual obligation to deliverwater to Orange Cove from February 28, 1989, until February22, 1990, the government continued to do so and that activityconstituted discretionary agency action. The ESA regulationsstate that "[r]einitiation of formal consultation is required andshall be requested . . . where discretionary Federal involve-ment or control over the action has been retained or is autho-rized by law and . . . a new species is listed . . .." 50 C.F.R.S 402.16. The discretionary activity of delivering water with-out a contract, coupled with the fact that the Orange Covecontract explicitly stated that the United States was not boundby the contract until it was validated in state court, support thedistrict court's conclusion that the Bureau had an obligationto withdraw the contract and initiate an NMFS consultationonce the salmon was listed. See Pacific Rivers, 30 F.3d at1053-56 (ESA consultation required for ongoing projectsonce new threatened species listed). We conclude that the dis-trict court did not err in setting aside the Orange Cove con-tract. 2. Chowchilla and MaderaChowchilla and Madera argue that their contracts areunique from the other Non-federal Defendants because Mad-era and Chowchilla had originally possessed the land wherethe Friant dam was built and had adjudicated rights to thewater of the San Joaquin River. In return for conveying theland and the water rights to the United States, Madera andChowchilla argue that their 1939 contracts guaranteed a per-manent supply of water from the Friant dam of 270,000 acrefeet of water annually. That contract was replaced by a 1951contract. Madera and Chowchilla argue that when the 1951contract expired, they were reinvested with their rights underthe 1939 contract and, therefore, they are exempt from theESA. However, in Madera Irrigation Dist. v. Hancock, 985F.2d 1397, 1405-06 (9th Cir. 1993), the court concluded thatthese districts are not exempt from requirements under NEPAand the ESA. Chowchilla's and Madera's arguments to thecontrary are without merit. 3. Chowchilla, Terra Bella and Delano-EarlimartChowchilla, the Terra Bella Irrigation District and theDelano-Earlimart Irrigation District argue that even thoughtheir contracts were executed by the Bureau prior to the issu-ance of the FWS Biological Opinion, all three were validatedby the state court after the October 15, 1991, "no jeopardy"Biological Opinion was issued. Therefore, they argue that thevalidation date serves to keep their contracts from violatingthe ESA.This argument was not raised in the district court and wedecline to consider it for the first time on appeal. See ParksSch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1487 n.4 (9thCir. 1995) (failure to raise issue before the district court con-stitutes a waiver of that issue).II. National Environmental Policy Act[15] NEPA requires all federal agencies to consider theenvironmental consequences of all "major Federal actions sig-nificantly affecting the quality of the human environment" bypreparing an EIS before undertaking the action. 42 U.S.C.S 4332(2)(C). Instead of preparing an EIS, an agency maymake a factual determination that an EIS is unnecessary byconducting an environmental assessment (EA) of its proposedaction and issuing a Finding of No Significant Impact(FONSI) on the environment. See 40 C.F.R.S 1501.4; SierraClub v. United States Forest Serv., 843 F.2d 1190, 1193 (9thCir. 1988). NEPA is not retroactive and only applies to majoragency actions that occurred after 1969.[16] It is undisputed that the Bureau did not prepare an EAor an EIS before renewing these water contracts. The Bureauargues that there is no need for this court to address the NEPAissue because if these 14 contracts are rescinded, then thePlaintiffs have received complete relief. The CVPIA requiresthe government to complete an EIS before it may enter intoany subsequent Friant renewal contracts. CVPIA, Pub. L.102-575, S 3404(c)(1), 1992 U.S.C.C.A.N. (106 Stat.) at4709. Where intervening legislative changes settle a contro-versy, the action may be moot. Nevada v. Watkins, 943 F.2d1080, 1083 (9th Cir. 1991). We conclude that the NEPA issuehas been mooted by the remedy of contract rescission andCVPIA's requirement that an EIS be completed on this dambefore the re-execution of the contracts.III. Section 5937 of the Fish and Game CodeSection 5937 of the California Fish and Game Code states: The owner of any dam shall allow sufficient water at all times to pass through a fishway, or in the absence of a fishway, allow sufficient water to pass over, around or through the dam, to keep in good condi- tion any fish that may be planted or exist below the dam.In the Order of April 30, 1992, the district court concludedthat the Bureau was not exempt from S 5937 and denied themotion to dismiss. See 791 F. Supp. at 1431-36. The districtcourt also concluded that the CVPIA did not preemptS 5937.See Order of October 7, 1993. In the January 16, 1997, Order,the district court concluded that, due to the contract invalida-tions, the S 5937 claim was not ripe. We hold that the districtcourt erred and remand for a determination on the merits.[17] Ripeness is a question of law reviewed de novo. SanDiego County Gun Rights Comm. v. Reno, 98 F.3d 1121,1124 (9th Cir. 1996). A case is generally considered ripe if:(1) the relevant issues are sufficiently focused to permit judi-cial resolution without further factual development, see Clin-ton v. Acequia, Inc., 94 F.3d 568, 572 (9th Cir. 1996); and (2)the parties would suffer a hardship by the postponement ofjudicial action, see Abbott Lab. v. Gardner,
387 U.S. 136
, 149(1967). Where the Bureau is not complying with S 5937 andits obligation to comply with S 5937 is in dispute, a determi-nation of the S 5937 issue is ripe. The rescission of the 14water contracts is unrelated to the timeliness of the S 5937claim. The S 5937 claim is directed towards the owner of thedam, the Bureau, whose duty to comply with state law, if thelaw applies, exists independent of any contractual arrange-ments with the Non-federal Defendants.The Non-federal defendants challenge the district court'sruling that S 5937 was not, on its face, preempted by federallaw. We affirm on the facial preemption issue.Section 8 of the Reclamation Act provides: Nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the con- trol, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this Act, shall proceed in conformity with such laws . . . .43 U.S.C. S 383. In California v. United States,
438 U.S. 645
(1978), the Court stated that the "cooperative federalism" ofS 8 required the United States to comply with state water lawsunless such a law was directly inconsistent with clear con-gressional directives regarding the project. Id. at 650, 678. Onremand to the Ninth Circuit, this court concluded that the term"congressional directive" meant a preemptive federal statute.United States v. California, 694 F.2d 1171, 1176-77 (9th Cir.1982).[18] The CVPIA provides that Friant dam water is not tobe released from the Friant dam to comply with the provisionsof the CVPIA regarding the development of a plan to reestab-lish fish below the dam. CVPIA, Pub. L. No. 102-575,S 3406(c)(1), 1992 U.S.C.C.A.N. (106 Stat.) at 4721.10 TheNon-federal Defendants argue that this provision is a clearcongressional directive that water is not to be released fromthe Friant dam pursuant to any law, state or federal, until it isspecifically approved by Congress. However, the statutestates that there are not to be any releases of the Friant damwater "as a measure to implement this title," this title beingthe CVPIA. It would have been a simple matter for Congressto bar the release of Friant dam water, without including theclause "as a measure to implement this title" twice in thesame sentence. There is no clear directive in the CVPIAwhich preempts the application of S 5937 if the state lawcould be implemented in a way that is consistent with Con-gress' plan to develop and restore fisheries below the Friantdam in a manner that is "reasonable, prudent, and feasible."CVPIA, Pub. L. 102-575, S 3406(c), 1992 U.S.C.C.A.N. (106Stat.) at 4721.[19] The district court, as the Bureau points out, neverexplicitly ruled that S 5937 applied to the Friant dam. Thereare several other issues that the district court did not address.For example, the district court did not determine whetherS 5937 is applicable to the Friant dam under state law. It ispreferable to determine whether the state law applies beforereaching a determination that state law has been preempted.The district court also did not reach the issue of whether theactual application of S 5937 is inconsistent with the CVPIA.It has yet to be determined how much water release would berequired under S 5937 and whether that would be consistentwith the CVPIA. We remand these issues to the district courtfor a determination on the merits.IV. Improper Use of EvidenceWith their summary judgment motion, the Plaintiffs filedthree expert affidavits which addressed the environmentalimpacts of the Friant dam. The Non-federal Defendants fileda motion to strike these affidavits which the court denied. TheNon-federal Defendants claim that these affidavits addresseddisputed factual issues, and that they were not permitted tocross-examine the experts or conduct discovery to respond tothe assertions in the affidavits. In the Order of May 31, 1995,the district court appears to rely on these affidavits, in part,and stated that the Plaintiffs' "extensive scientific ecologicalevidence documents" indicated that the total diversion of theriver caused environmental harm. The Non-federal Defen-dants contend that the district court abused its discretion indenying further discovery in violation of Fed.R.Civ.P. 56(f).The Non-federal Defendants also claim that the affidavitswere irrelevant to the legal questions at hand.We review the district court's discovery rulings for anabuse of discretion. Amarel v. Connell, 102 F.3d 1494, 1515(9th Cir. 1996). The district court may continue a motion forsummary judgment if the opposing party needs time to con-duct further discovery. See Fed.R.Civ.P. 56(f); Garrett v. Cityand County of San Francisco, 818 F.2d 1515, 1518 (9th Cir.1987). A refusal to permit further discovery pursuant to Rule56(f) is reviewed for an abuse of discretion. Nidds v.Schindler Elevator Corp., 113 F.3d 912, 920 (9th Cir. 1996),cert. denied 118 S. Ct. 369 (1997). "We will only find that thedistrict court abused its discretion if the movant diligentlypursued its previous discovery opportunities, and if themovant can show how allowing additional discovery wouldhave precluded summary judgment." Qualls v. Blue Cross ofCal., Inc., 22 F.3d 839, 844 (9th Cir. 1994).The Non-federal Defendants' Rule 56(f) argument is with-out merit. The Non-federal Defendants never formally filed aRule 56(f) motion requesting a continuance of the summaryjudgment hearing to conduct further discovery. They contendthat their motion to strike should have served as a Rule 56(f)motion. But that motion, which was not made until sixmonths after the summary judgment decision was issued, wasclearly untimely for Rule 56(f) purposes. Regardless ofwhether the Non-federal Defendants raised a timely 56(f)motion or diligently pursued discovery, the Non-federalDefendants have not pointed to any evidence that they couldhave discovered that would have precluded summary judg-ment. See Garrett, 818 F.2d at 1518.On the relevancy issue, the Plaintiffs assert that the expertaffidavits were relevant to the legal issue of whether the watercontracts were an irreversible and irretrievable commitmentof resources. The district court did rely on the declarationsregarding environmental harm to conclude that there was anirreversible and irretrievable commitment of resources. How-ever, it appears that the court could have reached the samelegal conclusion without any concrete evidence of ecologicalharm. See Pacific Rivers, 30 F.3d at 1057 (timber sales consti-tute per se irreversible and irretrievable commitment ofresources). Therefore, if there were any error it was harmless.CONCLUSIONWe conclude that the Bureau violated the ESA by makingirreversible and irretrievable commitments of resources priorto completing the required consultations with the FWS andthe NMFS. The remedy of contract rescission was well withinthe district court's discretion. The NEPA issue is moot. How-ever, we reverse the holding that the S 5937 claim was unripeand remand for a determination of that issue. The Plaintiffsshall recover their costs on appeal from the Non-federalDefendants. The Federal Defendants shall bear their owncosts on appeal.AFFIRMED in part, REVERSED and REMANDED inpart. the end
___________________________FOOTNOTES 1 All of the Non-federal Defendants, except for the Friant Water UsersAuthority, have water service arrangements with the Bureau.2 The Bureau does not challenge the district court's determination thatthere was an ESA violation or the remedy of contract rescission.3 This issue was raised for the first time on a motion for reconsiderationwhich the district court addressed in its Jan. 16, 1997, Order.4 The Orange Cove contract did not include this provision. That contractwas the first contract renewed and it was executed prior to the court'sorder requiring all future contracts to contain such a provision. However,the Bureau and the FWS had informally consulted and mutually agreedthat the Orange Cove contract was not likely adversely to affect any listedspecies.5 The district court also concluded that there was a per se violation ofthe ESA even if the contracts in this case were not an irreversible and irre-trievable commitment of resources. We need not decide whether the dis-trict court was mistaken because there was an irreversible and irretrievablecommitment of resources.6 The district court also correctly concluded that if the Bureau is not per-mitted to execute contracts that constitute an irreversible and irretrievablecommitment of resources during the formal consultation, it also was notpermitted to do so before it had initiated formal consultation. See 16U.S.C. S 1536(d); Pacific Rivers, 30 F.3d at 1056-57; Conner v. Burford,848 F.2d 1441, 1455 (9th Cir. 1988). Therefore, all contracts executedprior to May 22, 1991, violated the ESA.7 This argument only applies to the ESA violation arising out of theFWS consultation process. Even if the untimely FWS consultation couldbe mooted by the issuance of a "no jeopardy" opinion, the failure to con-sult with NMFS still renders the contracts subject to rescission.8 In the district court, the Plaintiffs challenged the validity of the FWS"no jeopardy" Biological Opinion. This claim was dismissed without prej-udice because the contract rescission offered complete relief.9 Clause 30 of the Orange Cove contract provides as follows: The Contractor, after execution of this contract, shall promptly seek to secure a decree of a court of competent jurisdiction of the State of California, confirming the execution of this contract. The Contractor shall furnish the United States a certified copy of the final decree, the validation proceedings, and all pertinent support- ing records of the court approving and confirming this contract, and decreeing and adjudging it to be lawful, valid, and binding on the Contractor. This contract shall not be binding on the United States until such final decree has been secured.Contract between the United States and the Orange Cove Irrigation Dis-trict (emphasis added).10 Section 3406(c)(1) of the CVPIA provides: The Secretary shall . . . develop a comprehensive plan, which is reasonable, prudent, and feasible, to address fish, wildlife, and habitat concerns on the San Joaquin River . . . During the time that the Secretary is developing the plan provided for in this sub- section, and until such time as Congress has authorized the Secre- tary to implement such plan . . . the Secretary shall not, as a measure to implement this title, make releases for the restoration of flows between Gravelly Ford and the Mendota Pool and shall not thereafter make such releases as a measure to implement this title without a specific Act of Congress authorizing such releases.