Center for Bio. Div. V. U.S. Dept., Housing, Urban, CIV 05-261-TUC-CKJ.

• Decision Date: 26 March 2008
• Docket Number: No. CIV 05-261-TUC-CKJ.,CIV 05-261-TUC-CKJ.
• Citation: 541 F.Supp.2d 1091
• Parties: CENTER FOR BIOLOGICAL DIVERSITY, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al., Defendants.
• Court: U.S. District Court — District of Arizona

541 F.Supp.2d 1091

CENTER FOR BIOLOGICAL DIVERSITY, et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, et al., Defendants.

No. CIV 05-261-TUC-CKJ.

United States District Court, D. Arizona.

March 26, 2008.

COPYRIGHT MATERIAL OMITTED

Andrew Evans Hartsig, McCrystie J. Adams, Earthjustice Legal Defense Fund, Neil Levine, Neil Levine Law Offices, Denver, CO, for Plaintiffs.

Bridget Kennedy Mcneil, U.S. Dept of Justice, Denver, CO, Robert L. Miskell, U.S. Attorneys Office, Tucson, AZ, Lawson Emmett Fite Thomas Said-Tomash Zia U.S. Dept of Justice, Washington, DC, for Defendants.

ORDER

JORGENSON, District Judge.

Pending before the Court are the parties' Motions for Summary Judgment [Docs. # 63, # 77]. Both parties have filed responses in opposition and replies to the respective motions. Oral argument was held on February 29, 2008. For the following reasons, Defendants' Motion for Summary Judgment is granted.

I. Background¹

The San Pedro River is one of the last free-flowing rivers in the desert Southwest. It is home to a myriad of plant and animal species and it supports a large riparian woodland area. Among those species are two that are listed as endangered on the Endangered Species list, the Hauchuca Water Umbel ("Umbel"), a plant, and the Southwest Willow Flycatcher ("Flycatcher"), a bird.²

The United States Congress recognized the importance of the San Pedro River and its dependent riparian habitat in 1988 by creating the San Pedro Riparian National Conservation Area (SPRNCA). 16 U.S.C. § 460xx states the SPRNCA was created "[i]n order to protect the riparian area and the aquatic, wildlife, archeological, paleontological, scientific, cultural, educational, and recreational resources of the public lands surrounding the San Pedro River in Cochise County, Arizona..." The conservation area consists of 56,431 acres and is 36 miles long. In 1999, the United States Fish and Wildlife Service ("FWS") designated 33.7 miles of the San Pedro as critical habitat for the endangered Umbel. In addition, the Flycatcher also relies on the San Pedro for habitat. However, groundwater pumping from the surrounding area is causing the water table to drop, thus draining the river. The San Pedro River has seen reduced flows and actually dried up completely for the first time in its recorded history at one area in 2005.

The FWS concluded in its 2002 Ft. Huachuca Biological Opinion that deficit groundwater pumping is the greatest threat to the Umbel habitat. Further, declining flows from the river threaten the Flycatcher. The FWS said that concerted effort must be made to manage water resources.

To combat this trend, the City of Sierra Vista formed the Water Management Team in order to take a proactive approach to water conservation. See Defendants' Exhibit A (Part 1) [Doc. # 100-3] Through water saving goals, projects, rebates, and other conservation efforts the city has reduced per-capita water use to levels last seen in the year 2000, even though the population has increased. Id. The San Pedro watershed also includes the cities of Bisbee, Huachuca City, and Tombstone, as well as unincorporated areas of Cochise County.

Plaintiffs argue that these efforts fall short of what is needed to preserve the SPRNCA. Plaintiffs allege that Defendants, U.S. Department of Housing and Urban Development ("HUD"), U.S. Department of Veterans Affairs ("VA"), and the Small Business Administration ("SBA") failed to comply with the Endangered Species Act ("ESA") and the National Environmental Policy Act ("NEPA"). Defendants provide mortgage insurance, loan guarantees, and loans ("financial assistance") for residential and commercial development in Sierra Vista, Arizona.

In particular, the mission of HUD is to realize "... the goal of a decent home and a suitable living environment for every American family ..." 42 U.S.C. § 1441. HUD accomplishes this mission by providing mortgage insurance to low income families, allowing those families to purchase a home with favorable terms such as lower down payments and reduced interest rates. According to Plaintiffs' Statement of Undisputed Facts, HUD provided loan guarantees for 661 homes from 2000 to 2004, and 798 from 2000 through June 30, 2006. The total amount insured from 2000 through June 30, 2006 was $78,178,095. HUD also issued loan guarantees for an Alzheimer's facility and two apartment complexes in Sierra Vista.

The VA's mission is to provide housing assistance to veterans and their families. 38 U.S.C. §§ 3701-3764. The VA provides assistance by providing home loan guarantees. Many of these guarantees are automatic, as long as the veteran applying meets certain minimum criteria. According to Plaintiffs' Statement of Undisputed Facts, the VA guaranteed 2,062 home loans in Cochise County from fiscal year 2000 through fiscal year 2004. In total, the VA provided loan insurance for 4,073 loans between October 1999 and May 2005. The total amount guaranteed was $149,516,809 for that time period.

The SBA's mission is to provide loan assistance to small businesses. Like the VA, the SBA provides loan guarantees. The loans obtained may be used for a variety of purposes, such as equipment purchase, furniture and fixtures, as well as building renovation or construction. The SBA also provides revolving lines of credit for small businesses. According to Plaintiffs' Statement of Undisputed Facts, between August 2000 and February 2005 the SBA provided financial assistance to 34 different businesses.

All of the above programs share one thing in common, there is no initial investment made by the federal agencies. The agencies merely provide a guaranty should the borrower default on the loan. Further, none of the loan guarantees relate to the construction of buildings in the critical habitat of the Umbel or the Flycatcher. However, Plaintiffs argue that the actions by these agencies nonetheless detrimentally affects the San Pedro River.

In Plaintiffs' Motion for Summary Judgment they allege that Defendants failed to comply with the ESA each time they provided financial assistance because they failed to consult with the FWS in order to assess the impact on the Umbel and the Flycatcher. In addition, it is alleged that the Defendants failed to comply with NEPA; in a similar fashion, because they did not review the environmental impacts of their financial assistance on the environment and on these species. The residential and commercial development in Sierra Vista facilitated by the Defendants pumps groundwater from an aquifer that supplies water to the San Pedro River.

Defendants do not contest that groundwater pumping threatens the natural resources of the San Pedro. Rather, they allege that the methods their financial assistance takes, to individuals and small business owners in Sierra Vista, do not rise to a level requiring compliance with the ESA or NEPA. Nor do the Defendants contest the Plaintiffs' standing to bring these claims. The Court finds that the Plaintiffs have standing to bring their claims, see Lujan v. Defenders of Wildlife, 504 U.S. 555, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992) (Plaintiffs have established that (1) they have personally suffered an injury in fact; (2) the injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, not merely speculative, that the injury will be redressed by a favorable decision); also Hunt v. Washington State Apple Advertising Commission, 432 U.S. 333, 343, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977) (association has standing as long as members of the association satisfy standing).

II. Standard of Review

Summary judgment is appropriate when, viewing the facts in the light most favorable to the nonmoving party, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986), "there is no genuine issue as to any material fact and [] the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is "material" if it "might affect the outcome of the suit under the governing law," and a dispute is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Thus, factual disputes that have no bearing on the outcome of a suit are irrelevant to the consideration of a motion for summary judgment. Id. In order to withstand a motion for summary judgment, the nonmoving party must show "specific facts showing that there is a genuine issue for trial," Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Moreover, a "mere scintilla of evidence" does not preclude the entry of summary judgment. Anderson, 477 U.S. at 252, 106 S.Ct. 2505.

In the case of NEPA, the Court reviews an agency's compliance under the Administrative Procedure Act ("APA"). 5 U.S.C. § 706(2)(A). An agency's decision is traditionally reviewed to determine if it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;" Id. However, if neither an Environmental Assessment ("EA") nor an Environmental Impact Statement ("EIS") have been completed, and what is before the court are primarily legal issues, a court reviews the decision under "the less deferential standard of reasonableness" Ka Makani `O Kohala Ohana Inc. v. Water Supply, 295 F.3d 955, 959 (9th Cir. 2002) (internal quotation marks and citations omitted).

The ESA does not specify a standard of review and thus courts apply the APA as well. See Bennett v. Spear, 520 U.S. 154, 177-78, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997); 5 U.S.C. §§ 701-706. As the primary question before this Court is of a legal nature and no steps have been taken by the Defendants pursuant to the ESA, this Court will review their actions under the "reasonableness" standard.

III. Analysis

A. ESA

The ESA provides a means to conserve the ecosystems upon which endangered species and threatened species depend. 16...