On February 6, 2023, a federal judge in California issued a ruling concluding that the Endangered Species Act (“ESA”) preempted an order from the Oregon Water Resources department (“OWRD”) which prohibited the United States Bureau of Reclamation (“Reclamation”) from releasing water from the Upper Klamath Lake except for irrigation purposes. According to the court, the OWRD order was preempted because it prevented Reclamation from fulfilling its ESA duties. Therefore, the court determined that the order was invalid and could not be enforced.

Background

The Klamath River originates in the high desert of Oregon. From its starting point, it flows 257 miles through Southern Oregon, Northern California, and into the Pacific Ocean. The Klamath River drains a roughly 12,000 square-mile basin, commonly referred to as the Klamath Basin. A variety of water users depend on water within the Klamath Basin, including agricultural producers, and multiple federally recognized Native American tribes. The Klamath River is also home to various endangered species, including the Southern Oregon/Northern California Coast Coho Salmon.

Water users in the Klamath Basin receive water via the Klamath Project which was authorized by the Secretary of the Interior in 1905. The Klamath Project is a complex series of canals, dams, and diversion structures that delivers water to approximately 230,000 acres of irrigated land. Central to the Klamath Project is the Upper Klamath Lake (“UKL”) which serves as the Project’s primary storage feature. However, the UKL is relatively shallow with a limited storage capacity of around 562,000 acre-feet of water. The UKL’s limited capacity, combined with the number of water users in the Klamath Basin and the on-going drought in the region means that UKL water is often in short supply.

The Bureau of Reclamation (“Reclamation”) is tasked with administering the Klamath Project, which it does in part by monitoring water levels in the UKL and making distributions of UKL water through the Link River Dam. Because Reclamation is a federal agency, it’s management of the Klamath Project must comply with the Endangered Species Act (“ESA”) which requires all federal agencies to ensure that “any action authorized, funded, or carried out by [a federal] agency […] is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat of such species[.]” 16 U.S.C. § 12536(a)(2). Reclamation must also ensure that its management of the UKL complies with Oregon state law because the UKL is located in Oregon.

In April 2021, the Oregon Water Resources Department (“OWRD”), the state agency responsible for water management in the state of Oregon, issued an order limiting the type of water releases Reclamation could make from the UKL. Specifically, OWRD’s 2021 order directed Reclamation to “immediately preclude or stop the distribution, use or release of stored water from the UKL” unless the water would be used for irrigation. The 2021 order came during a period of intense drought in the Klamath Basin. In 2020, drought conditions were such that Reclamation was unable to fully allocate UKL water to irrigators. However, Reclamation continued to release water from the UKL in order to satisfy its ESA responsibilities by maintaining water levels in the Klamath River sufficient to support the endangered species that depend on Klamath River water. Reclamation’s actions prompted a lawsuit in Oregon state court that resulted in a court order directed OWRD to stop allowing releases of water from the UKL without first determining that the water would be for use by “users with existing water rights” in the Klamath River.

Following the state court’s decision, OWRD issued the 2021 order directing Reclamation to immediately stop releasing water from the UKL except for water that would be used by irrigators with water rights in the Klamath River Basin. That action from OWRD prompted Reclamation to file a claim in federal court asking for the 2021 order to be overturned.

The Court’s Decision

In Yurok Tribe v. U.S. Bureau of Reclamation, No. 19-cv-04405 (N.D. Cal. Feb. 6, 2023), Reclamation asked the court to find that the 2021 OWRD order was invalid because it interfered with Reclamation’s federal ESA responsibilities. Reclamation argued that the 2021 order was preempted by federal law and should be ruled invalid. Ultimately, the court agreed and overturned the 2021 order on the basis of preemption.

According to the court, the central question of the case was whether Reclamation must comply with the OWRD order prohibiting it from releasing water from the UKL. At the heart of the question was whether OWRD’s order was preempted by the federal ESA. Preemption is a legal doctrine that refers to the idea that a law passed by a “higher” form of government may displace a law passed by a “lower” form of government if the two laws conflict. The court referred to two different types of preemption: implied preemption, which is the principle that state laws are preempted when they conflict with federal law; and conflict or obstacle preemption which occurs when compliance with both federal and state law is either physically impossible or the state law serves as an obstacle to “the accomplishment and execution of the full purposes and objectives of Congress.” The court explained that preemption analysis is guided by two principles. The first principle is that the purpose of Congress in enacting the federal law at issue is the “ultimate touchstone” of preemption analysis. The second principle is that courts must start with the assumption that state authority to pass laws regulating activity its borders is not preempted “unless that was the clear and manifest purpose of Congress.”

Began its analysis by considering the congressional purpose of the ESA. In the landmark United States Supreme Court decision Tennessee Valley Authority v. Hill, 437 U.S. 153 (1978), the Court determined that “the plain intent of Congress in enacting this statute was to halt and reverse the trend toward species extinction, whatever the cost.” To reach that conclusion, the Supreme Court relied on various ESA provisions that illustrated Congress’s intent. In Yurok Tribe v. U.S. Bureau of Reclamation, the court cited the Supreme Court’s decision to note that “beyond doubt” the Congressional purpose of the ESA was to grant conservation of endangered species “the highest of priorities.”

Next, the court considered whether it was physically impossible for Reclamation to comply with both the ESA and the OWRD order, or whether OWRD’s order stands as an obstacle to the accomplishment and execution of Congress’s intent in enacting the ESA. The first step of that analysis required the court to address whether the ESA applied to Reclamation’s operation of the UKL. Although the ESA requires federal agencies to ensure that the actions they take to not jeopardize the existence of endangered or threatened species or their habitat, the Supreme Court has determined that the requirement only applies to discretionary agency actions. If an agency is required by law to carry out a specific action “once certain specified triggering events have occurred,” then the ESA requirement does not apply. Importantly, this only applies to actions where the federal agency has no discretion. Here, the court concluded that Reclamation did have discretion in how it managed the Klamath Project in general and the UKL in specific. According to the court, the Congressional mandate granting Reclamation the authority to manage the Klamath Project directs Reclamation to “perform any and all acts and make such rules and regulations as may be necessary and proper for the purpose of carrying out the provisions of this Act into full force and effect.” 43 U.S.C. § 373. Additionally, the Ninth Circuit Court of Appeals has previously ruled in Klamath Water Users Protective Ass’n v. Patterson, 204 F.3d 1206 (9th Cir. 1999) that Reclamation has a legal duty to manage the UKL in compliance with the ESA.

Having determined that Reclamation must comply with the ESA in operating the Klamath Project and the UKL, the court returned to the question of whether it was physically impossible for Reclamation to comply both with the ESA and OWRD’s 2021 order, or if the order serves as an obstacle to accomplishing the purpose of the ESA. The court concluded that the conflict between the 2021 order and the ESA was “apparent on the face of the order itself.” Because the 2021 order prohibited Reclamation from releasing water from UKL except for irrigation purposes, complying with the order would prevent Reclamation from releasing water for the purposes of benefiting endangered species within the Klamath River which would jeopardize the endangered species that depend on that water. Because Reclamation could not comply with OWRD’s order and the ESA at the same time, the court concluded that the order was preempted by the ESA and therefore invalid.

Going Forward

The Klamath Project has a long history of tension between the various water users that rely on Klamath River water. As drought conditions worsen in the region, water users will continue to struggle as less water is available for competing uses. This case is the latest court decision to conclude that Reclamation is required to satisfy its ESA responsibilities when operating the Klamath Project. The Klamath Project is not the only water delivery system that Reclamation is responsible for managing in the Western United States, and almost all of them serve a variety of different water users and are home to endangered species. With drought conditions continuing across the West, Reclamation will continue to need to balance the needs of water rights holders with its ESA responsibilities.

To read the court’s decision in Yurok Tribe v. U.S. Bureau of Reclamation, click here.

To read the text of the ESA, click here.

For more National Agricultural Law Center resources on the ESA, click here.

For more National Agricultural Law Center resources on water law, click here.