IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. No CENTER FOR BIOLOGICAL DIVERSITY and PACIFIC ENVIRONMENT,

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1 Case: /06/2010 ID: DktEntry: 19 Page: 1 of 74 IN THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT No CENTER FOR BIOLOGICAL DIVERSITY and PACIFIC ENVIRONMENT, v. Plaintiffs-Appellants, KEN SALAZAR, Secretary of the Interior and the UNITED STATES FISH AND WILDLIFE SERVICE, and Defendants-Appellees, ALASKA OIL AND GAS ASSOCIATION, Defendant-Intervenor-Appellee. On Appeal from the United States District Court for the District of Alaska Civ. No. 3:08-cv-0159-RRB ANSWERING BRIEF OF FEDERAL APPELLEES ROBERT DREHER Acting Assistant Attorney General OF COUNSEL: KENNETH M. LORD Office of the Solicitor U.S. Dept. of the Interior ANDREW C. MERGEN KRISTEN L. GUSTAFSON DEAN K. DUNSMORE DAVID C. SHILTON Attorneys United States Department of Justice Environment & Natural Resources Division Washington, DC (202)

2 Case: /06/2010 ID: DktEntry: 19 Page: 2 of 74 TABLE OF CONTENTS Page JURISDICTION...1 STATEMENT OF THE ISSUES...1 STATEMENT OF THE CASE...2 STATUTORY AND REGULATORY BACKGROUND...4 A. The Marine Mammal Protection Act...4 B. The 1983 Regulations Implementing the MMPA...6 C. The National Environmental Policy Act...8 D. The Endangered Species Act...8 STATEMENT OF FACTS...10 A. The Chukchi Sea Incidental Take Regulations...10 B. Pacific Walruses...12 C. Polar Bears...14 D. The Service s Small Numbers and Negligible Impact Conclusions...15 E. The ESA Listing of the Polar Bear...17 STANDARD OF REVIEW...18 SUMMARY OF ARGUMENT...19 ARGUMENT...21 I. THE CHUKCHI SEA INCIDENTAL TAKE REGULATIONS DO NOT VIOLATE THE MMPA REQUIREMENT THAT

3 Case: /06/2010 ID: DktEntry: 19 Page: 3 of 74 AUTHORIZED TAKES BE FOR SMALL NUMBERS OF MARINE MAMMALS...21 A. The Center Has Not Shown That the Service s Interpretation of Small Numbers Is Irrational or Clearly Contrary to the Statutory Language Defining Small Numbers as a Portion of the Stock or Population, Rather than as a Fixed Number Applicable to All Species, Is a Permissible Interpretation of the MMPA The MMPA Does Not Require the Service to Calculate the Number of Animals Expected to be Incidentally Taken...28 B. The Service s Small Numbers Conclusion Was Supported by the Record The Service s Small Numbers Determination Did Not Fail to Consider Any Important Aspect of the Problem The Small Numbers Determination Was Not Based on Any Improper Factor...38 II. III. THE SERVICE COMPLIED WITH THE ENDANGERED SPECIES ACT...41 THE ENVIRONMENTAL ASSESSMENT COMPLIED WITH NEPA...49 CONCLUSION...57 CERTIFICATION OF COMPLIANCE...58 STATEMENT OF RELATED CASES...59 CERTIFICATE OF SERVICE...60 ii

4 Case: /06/2010 ID: DktEntry: 19 Page: 4 of 74 TABLE OF AUTHORITIES Cases: Page Arizona Cattle Growers Ass'n v. FWS, 273 F.3d 1229 (9th Cir. 2001)... 45,46 Arizona Health Care Cost Containment System v. McClellan, 508 F.3d 1243 (9th Cir. 2007)...26 Center for Biological Diversity v. Kempthorne, 588 F.3d 701 (9th Cir. 2009)...3,4,21,22,34,39,40,42,50,52,54 Center of Biological Diversity v. Rumsfeld, 198 F. Supp. 2d 1139 (D. Ariz. 2002)...50 Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)...25 Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971)...41 City of Sausalito v. O'Neill, 386 F.3d 1186 (9th Cir. 2004)...19 Conlan v. U.S. Dept. of Labor, 76 F.3d 271 (9th Cir. 1996)...32 Dickinson v. Zurko, 527 U.S. 150 (1999)...43 Environmental Defense Center, Inc. V. U.S.E.P.A., 344 F.3d 832 (9th Cir. 2003)...43 Environmental Protection Information Center v. U.S. Forest Service, 451 F.3d 1005 (9th Cir. 2006)...51 Envtl. Defense Ctr., Inc. v. EPA, 344 F.3d 832 (9th Cir. 2003)... 34,43 iii

5 Case: /06/2010 ID: DktEntry: 19 Page: 5 of 74 Friends of the Earth v. Hintz, 800 F.2d 822 (9th Cir. 1986)...33 Friends of Yosemite Valley v. Scarlett, 439 F. Supp. 2d 1074 (E.D. Cal. 2006)...56 Independent Acceptance Co. v. California, 204 F.3d 1247 (9th Cir. 2000)...34 Lands Council v. McNair, 537 F.3d 981 (9th Cir. 2008) (en banc)... 3,20,34,38 Marsh v. Oregon Natural Resources Council, 490 U.S. 360 (1989)...20 National Ass'n of Home Builders v. Defenders of Wildlife, 551 U.S. 644 (2007)...41 National Parks & Conservation Ass'n v. Babbitt, 241 F.3d 722 (9th Cir. 2001)...48 Native Ecosystems Council v. U.S. Forest Service, 428 F.3d 1233 (9th Cir ,52 Natural Resources Defense Council, Inc. v. Evans, 232 F. Supp. 2d 1003 (N.D. Cal. 2002)...29 North Idaho Community Action Network v. U.S. Dept. of Trans., 545 F.3d 1147 (9th Cir. 2008) NRDC v. Gutierrez, 2008 WL at *27-28 (N.D. Cal. 2008)...48 Oregon Natural Resources Council v. Allen, 476 F.3d 1031 (9th Cir. 2007)...46,47,48 Pit River Tribe v. U.S. Forest Service, F.3d, 2010 WL , 811 (9th Cir. 2010)...41 iv

6 Case: /06/2010 ID: DktEntry: 19 Page: 6 of 74 Ramsey v. Kantor, 96 F.3d 434 (9th Cir. 1996)... 55,56 Selkirk Conservation Alliance v. Forsgren, 336 F.3d 944 (9th Cir. 2003)...39 Sierra Club v. Penfold, 857 F.2d 1307 (9th Cir. 1988)...24 Southwest Center for Biological Diversity v. U.S. Forest Service, 100 F.3d 1443 (9th Cir. 1996)...33 Swan View Coalition v. Barbouletos, 2008 WL *14 (D. Mont. 2008), aff'd, 348 Fed. Appx WL , *1 (9th Cir. 2009)...48 United Food & Commercial Workers Union v. NLRB, Local 1036, 307 F.3d 760 (9th Cir. 2002) (en banc)... 25,26 United States v. Hoflin, 880 F.2d 1033 (9th Cir. 1989)...32 Wetlands Action Network v. United States Army Corps of Eng'rs, 222 F.3d 1105 (9th Cir. 2000)... 41,42 Wind River Mining Corp. v. United States, 946 F.2d 710 (9th Cir. 1991)...24 STATUTES: Administrative Procedure Act 5 U.S.C U.S.C Endangered Species Act 16 U.S.C. 1433(d) U.S.C. 1531(b)... 2,9 16 U.S.C. 1532(6) U.S.C. 1532(19)...9 v

7 Case: /06/2010 ID: DktEntry: 19 Page: 7 of U.S.C. 1532(20) U.S.C. 1536(a)(2)... 9,44 16 U.S.C. 1536(b)(4)...9,10,40 16 U.S.C. 1536(b)(4)(c) U.S.C. 1536(o) U.S.C. 1536(o)(2) U.S.C. 1538(a)(1)(B) U.S.C. 1538(a)(1)(G)...9 Marine Mammal Protection Act 16 U.S.C. 1361(2) U.S.C. 1362(12)(A)(i) U.S.C. 1362(12)(A)(ii) U.S.C. 1362(13) U.S.C. 1362(18)(A) U.S.C U.S.C. 1371(a) U.S.C. 1371(a)(1) U.S.C. 1371(a)(2) U.S.C. 1371(a)(5)... 2,10 16 U.S.C. 1371(a)(5)(A)... 5,6,7,15,30,31 16 U.S.C. 1371(a)(5)(A)(i)...1,6,23 16 U.S.C. 1371(a)(5)(A)(i)(I)... 6,28 16 U.S.C. 1371(a)(5)(A)(i)(II)(aa) U.S.C U.S.C. 1374(b)(2)(A) U.S.C.A. 1386(a)(2) U.S.C.A. 1387(f)(4)(B)...31 National Environmental Policy Act 42 U.S.C. 4332(c) U.S.C U.S.C U.S.C. 2401(a)...24 RULES and REGULATIONS: 40 C.F.R (a)...8 vi

8 Case: /06/2010 ID: DktEntry: 19 Page: 8 of C.F.R ,27 50 C.F.R (c) C.F.R (d)(1)(iii)(A) C.F.R (d)(3)... 8,32 50 C.F.R (e) C.F.R (f)... 7,8 50 C.F.R (f)(2) C.F.R C.F.R C.F.R C.F.R C.F.R C.F.R C.F.R (i) C.F.R (i)(1) C.F.R (i)(4) C.F.R (i)(1)(I) C.F.R (i)(4) C.F.R (i)(5) C.F.R (a)...45 vii

9 Case: /06/2010 ID: DktEntry: 19 Page: 9 of Fed. Reg. 31,220, 31,225 (1983) Fed. Reg. 31, Fed. Reg. 27,443 (1991) Fed. Reg. 30, Fed. Reg. 33, ,11 73 Fed. Reg. 76,249, 76,251 (2008)...47 LEGISLATIVE HISTORY H.R. Report No at 19, reprinted at 1981 U.S.C.C.A.N. 1458, 1469 (Sept. 16, 1981)... 21,27 viii

10 Case: /06/2010 ID: DktEntry: 19 Page: 10 of 74 JURISDICTION Plaintiffs Center for Biological Diversity and Pacific Environment (hereafter referred to collectively as the Center ) asserted jurisdiction in the district court pursuant to 28 U.S.C (federal question). The district court issued an order that disposed of all claims of all parties on January 8, 2010, ER 2-7, and entered a final judgment on January 13, ER 1. The Center filed a timely notice of appeal on February 4, ER 8-9. This Court has jurisdiction pursuant to 28 U.S.C STATEMENT OF THE ISSUES 1. Where the Marine Mammal Protection Act authorizes the United States Fish and Wildlife Service to allow the incidental taking of small numbers of marine mammals for a period of up to five years if the Service finds that the total takings will have a negligible impact on the relevant species or population stock, 16 U.S.C. 1371(a)(5)(A)(i), may the Service reasonably conclude that small numbers should be considered in relation to the size of the relevant species or stock, rather than as an absolute quantity applicable to all marine mammal species, and reasonably conclude that an actual estimate of the number of animals that might be affected over the five years of the regulation is not required? 2. Did the Service reasonably conclude that the Endangered Species Act ( ESA ) did not require it to quantify the number of polar bears expected to be

11 Case: /06/2010 ID: DktEntry: 19 Page: 11 of 74 subjected to non-lethal incidental takes in the Incidental Take Statement accompanying the Services Biological Opinion prepared pursuant to 16 U.S.C. 1536(b), and did the Service s no-jeopardy conclusion in that BiOp properly rely, in part, on mitigation requirements that have proven effective under past incidental take regulations? 3. Did the Service s Environmental Assessment ( EA ) on the five-year incidental take regulation at issue adequately consider alternatives and the potential impacts of oil spills? STATEMENT OF THE CASE In June 2008, the United States Fish and Wildlife Service ( the Service ) promulgated five-year regulations under the Marine Mammal Protection Act ( MMPA ), 16 U.S.C. 1371(a)(5), that authorize for a five-year period the non-lethal, incidental take of polar bears and Pacific walrus by oil and gas activities in the Chukchi Sea and adjacent coast of Alaska. 73 Fed. Reg. 33,212, ER 167. Under the regulations, individual oil and gas operators may apply to the Service for a letter of authorization ( LOA ) covering particular activities for up to a year. The Service issued similar incidental take regulations for walruses and polar bears in the Chukchi Sea for the period See 56 Fed. Reg. 27,443 (1991). In the adjacent Beaufort Sea, the Service has issued incidental take 2

12 Case: /06/2010 ID: DktEntry: 19 Page: 12 of 74 regulations seven times covering the period from 1993 to the present. See ER 167. In Center for Biological Diversity v. Kempthorne, 588 F.3d 701 (9 th Cir. 2009) ( Kempthorne ), this Court upheld the Service s most recent incidental take regulations for oil and gas activities in the Beaufort Sea area. This Court pointed out that monitoring pursuant to these previous regulations had yielded much information about the industry s interactions with polar bears and walrus, and that this large store of information supported the Service s judgment that adverse effects on polar bears and walrus, particularly in light of the mitigation measures imposed on individual LOAs, would be negligible. 588 F.3d at 706, , 712. The Court stressed that in determining that impacts would be negligible, the Service made scientific predictions within the scope of its expertise, the circumstance in which we exercise our greatest deference. Id. at 711, citing Lands Council v. McNair, 537 F.3d 981, 993 (9 th Cir. 2008) (en banc). This Court also upheld the Service s EA and Finding of No Significant Impact pursuant to the National Environmental Policy Act ( NEPA ), stressing that the Service had made reasonable predictions on the basis of prior data that there would be no significant impacts to polar bears or walruses, and that we grant the Service great deference as it made a scientific prediction within the scope of its technical expertise. Kempthorne, 588 F.3d at

13 Case: /06/2010 ID: DktEntry: 19 Page: 13 of 74 Despite this Court s ruling upholding the similar five-year incidental take regulation for oil and gas activities in the Beaufort Sea, the Center here attempts to demonstrate that the Chukchi Sea regulation is fatally flawed. The Center points (Br. 3, n.1) to factual differences between the Chukchi and Beaufort Seas, such as that walruses are more abundant in the Chukchi Sea, and raises slightly different legal issues, such as whether the Service must quantify the number of animals that might be taken pursuant to either the MMPA or the ESA, and whether the Service s EA adequately considered alternatives and impacts of potential oil spills. However, on cross motions for summary judgment, the district court found that given the similarities between the regulations, both of which were supported by an extensive administrative record, and in light of the deferential standard of review it was required to apply, it was appropriate to grant summary judgment to the Service on all issues. ER 6. The district court entered a final judgment on January 8, 2010 (ER 1), and this appeal followed. STATUTORY AND REGULATORY BACKGROUND A. The Marine Mammal Protection Act Congress enacted the MMPA in 1972 based on its finding that certain marine mammal species and stocks were, or could be, in danger of extinction as a result of man s activities, and on its belief that such species and stocks should not be permitted to diminish beyond the point at which they cease to be a significant functioning element in the 4

14 Case: /06/2010 ID: DktEntry: 19 Page: 14 of 74 ecosystem of which they are a part. 16 U.S.C. 1361(2). In furtherance of this goal, the MMPA imposes a general moratorium on the taking of marine mammals. 16 U.S.C. 1371(a). The Act provides a number of exceptions to the moratorium, including the taking of marine mammals for scientific research, public display, and photography purposes, id. at (a)(1); the incidental taking of marine mammals in the course of commercial fishing operations, id. at (a)(2); and the incidental taking of small numbers of marine mammals pursuant to a specified activity in a specified geographic region under MMPA 101(a)(5)(A), id. at 1371(a)(5)(A), the provision at issue here. The term take means to harass, hunt, capture, or kill, or attempt to harass, hunt, capture, or kill any marine mammal. 16 U.S.C (13). Harassment is defined as any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering. 16 U.S.C (18)(A). MMPA 101(a)(5)(A) allows citizens of the United States who engage in a specified activity (other than commercial fishing) within a specified geographical region to request authorization for the taking of small numbers of 5

15 Case: /06/2010 ID: DktEntry: 19 Page: 15 of 74 marine mammals of a species or population stock pursuant to that activity for a period of no more than five consecutive years. 16 U.S.C. 1371(a)(5)(A)(i). The MMPA directs that the Secretary of the Interior or the Secretary of Commerce, depending on the species, 1 / shall allow the requested taking if, after notice and an opportunity for public comment, he determines that the total taking during the fiveyear period will have a negligible impact on affected marine mammal species or stocks and will not have an unmitigable adverse impact on the availability of such species or stock for taking for subsistence uses by Alaskan natives. 16 U.S.C. 1371(a)(5)(A)(i)(I). The Secretary must issue regulations setting out: (1) the permissible methods of taking pursuant to the activity and other means of effecting the least practicable adverse impact on the affected species or stock and its habitat, and (2) requirements pertaining to the monitoring and reporting of such taking. 16 U.S.C. 1371(a)(5)(A)(i)(II)(aa). B. The 1983 Regulations Implementing the MMPA. In 1983, the Service promulgated regulations to implement MMPA 101(a)(5)(A). 48 Fed. Reg. 31,225. Those regulations are codified at 50 C.F.R See Addenda to 1 / The Secretary of the Interior, through the Fish and Wildlife Service, implements the MMPA with respect to manatees, dugongs, polar bears, sea otters, and walruses. 16 U.S.C. 1362(12)(A)(ii). The Secretary of Commerce, through the National Marine Fisheries Service, implements the MMPA with respect to all cetaceans (whales, dolphins, and porpoises) and pinnipeds (seals and sea lions) except walruses. 16 U.S.C. 1362(12)(A)(i). 6

16 Case: /06/2010 ID: DktEntry: 19 Page: 16 of 74 Answering Brief of Intervenor Alaska Oil and Gas Assoc. at The 1983 regulations define a negligible impact as an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival. 50 C.F.R (c). They define small numbers as a portion of a marine mammal species or stock whose taking would have a negligible effect on that species or stock. Id. The Service s implementing regulations also contain a permitting requirement before the taking of any marine mammal is authorized. 50 C.F.R (f). Letters of Authorization (LOAs) are required to conduct activities under any regulation promulgated pursuant to MMPA 101(a)(5)(A). Id. Thus, an incidental take regulation like the one at issue here does not, standing alone, authorize the taking of any marine mammal. Rather, the incidental take regulation makes the required findings of negligible impact and no unmitigable impacts on availability for subsistence uses, and prescribes the permissible means of taking, means of effecting the least practicable adverse impact, and monitoring and reporting requirements. 50 C.F.R (d)(3) & (e). LOAs actually authorize taking on a case-by-case basis. 50 C.F.R (f). For an LOA to issue, the Service must confirm that the amount of take requested under the LOA is 7

17 Case: /06/2010 ID: DktEntry: 19 Page: 17 of 74 consistent with the findings made for the total allowable taking over the five-year period. 50 C.F.R (f)(2). C. The National Environmental Policy Act NEPA requires the preparation of an Environmental Impact Statement ( EIS ) for major Federal actions significantly affecting the quality of the human environment. 42 U.S.C. 4332(C). An environmental assessment ( EA ), on the other hand, is a concise public document that serves to [b]riefly provide sufficient evidence and analysis for determining whether to prepare an environmental impact statement or a finding of no significant impact. 40 C.F.R (a). D. The Endangered Species Act The ESA contains both substantive and procedural requirements designed to carry out its goal of conserving endangered and threatened species and the ecosystems on which they depend. 16 U.S.C. 1531(b). An endangered species is in danger of extinction throughout all or a significant portion of its range, while a threatened species is likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range. 16 U.S.C. 1532(6), (20). Section 9 of the ESA prohibits the taking of listed species. 16 U.S.C. 1538(a)(1)(B), (G). Take is defined as harass, harm, pursue, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct. 16 U.S.C. 1532(19). 8

18 Case: /06/2010 ID: DktEntry: 19 Page: 18 of 74 Section 7 of the ESA requires that federal agencies, in consultation with the Service, must insure that any action they authorize, fund, or carry out is not likely to jeopardize the continued existence of any endangered or threatened species. 16 U.S.C. 1536(a)(2). Formal consultation procedures under ESA 7(a)(2) require the Service to prepare a biological opinion ( BiOp ) as to whether the proposed action is likely to jeopardize the continued existence of a listed species. 50 C.F.R If the action is not likely to jeopardize but may result in the incidental take of members of the species, the Service provides an incidental take statement ( ITS ). 16 U.S.C. 1536(b)(4); 50 C.F.R (i)(1). Where the listed species is a marine mammal, the taking must first be authorized under MMPA 101(a)(5) before an ITS may issue. 16 U.S.C. 1536(b)(4)(c). An ITS specifies the impact of the incidental taking on the listed species, contains terms and conditions designed to minimize that impact, and, in the case of marine mammals, specifies any measures that are necessary to comply with MMPA 101(a)(5). 16 U.S.C. 1536(b)(4); 50 C.F.R (i). Taking that complies with the terms and conditions of an ITS is not considered a prohibited taking under ESA Section U.S.C. 1536(o)(2); 50 C.F.R (i)(5). 9

19 Case: /06/2010 ID: DktEntry: 19 Page: 19 of 74 STATEMENT OF FACTS A. The Chukchi Sea Incidental Take Regulations. Although the oil and gas industry has no specific legal obligation to obtain incidental take authorization before proceeding with exploration, production, and development activities, since 1991 industry has requested and the Service has issued regulations covering activities in Pacific walrus and polar bear habitat. ER 167; see supra at 2-3. On August 5, 2005, the Alaska Oil and Gas Association ( AOGA ), on behalf of its members, requested that the Service issue regulations to allow the nonlethal, incidental take of small numbers of walruses and polar bears in the Chukchi Sea area for a period of five years. ER 167. Addenda to this request were submitted to the Service in November 2006 and in January ER 168. The Service published proposed regulations in June 2007 and requested comments. 72 Fed. Reg. 30,670. The final regulations were issued on June 11, Fed. Reg. 33,212, ER The regulations are valid from June 11, 2008 through June 11, ER 167. They cover a geographic area encompassing approximately 90,000 square miles that includes the continental shelf of the Arctic Ocean adjacent to Alaska, the waters and seabed of the Chukchi Sea, and the terrestrial coastal land 25 miles inland between the western boundary of the National Petroleum Reserve - Alaska and the north-south line of Point Barrow. ER 169, 206 (map). The regulations address takings that occur during 10

20 Case: /06/2010 ID: DktEntry: 19 Page: 20 of 74 exploration activities only, which may consist of marine-streamer 3D and 2D seismic surveys, high-resolution site clearance surveys, offshore exploration drilling, onshore seismic exploration and exploratory drilling, and associated support activities. ER 169. The regulations identify the permissible methods of nonlethal taking, measures to ensure the least practicable adverse impact on Pacific walruses and polar bears, and requirements for monitoring and reporting. ER 168; 50 C.F.R , 118. Take is expected to be limited to minor, short-term, behavioral responses, like diving or moving away from the activity. ER 181, 187. Killing or intentional taking of marine mammals is prohibited. 50 C.F.R The regulations can be suspended or withdrawn if new information suggests they are having a greater than negligible impact. See ER 193. The regulations do not authorize the actual activities associated with oil and gas exploration; other federal and state agencies are responsible for permitting oil and gas activities on waters and lands within their jurisdiction. ER 168. Nor do the regulations themselves authorize the taking of marine mammals. Persons seeking take authorization for incidental takings associated with particular projects must apply for an LOA. A separate LOA is a mandatory requirement for each activity, (i.e., geophysical survey, seismic activity, and exploratory drilling). ER 168. LOA applicants must submit an Operations Plan for the activity, a polar bear 11

21 Case: /06/2010 ID: DktEntry: 19 Page: 21 of 74 interaction plan, and a site-specific marine mammal monitoring and mitigation plan to monitor the effects of authorized activities on walruses and polar bears. Id. LOAs will be granted only if the total level of taking by all applicants in a given year is consistent with the negligible impact and other findings in the regulations. LOAs include mitigation, monitoring, and reporting requirements specific to each activity. Id.; 50 C.F.R B. Pacific Walruses. The regulations were issued with an extensive preamble explaining the reasons for the Service s findings under the MMPA (ER ), along with extensive responses to comments on the proposed regulations (ER ). The preamble sets out substantial biological information on both walruses and polar bears. ER Pacific walruses are represented by a single stock of animals that inhabit the shallow continental shelf waters of the Bering and Chukchi Seas. The population ranges across the international boundaries of the United States and Russia. Estimating the population size of Pacific walruses has been problematic, but surveys generally indicate that the total number is over 200,000. ER 173. Walruses tend to be found in large groups that are distributed in a nonuniform fashion. Walrus distribution varies markedly with the seasons and is closely associated with the presence of pack ice. During the late winter breeding 12

22 Case: /06/2010 ID: DktEntry: 19 Page: 22 of 74 season, walruses are found in the Bering Sea. In spring and early summer, the population follows the retreating pack ice into the Chukchi Sea, though thousands of adult males remain in the Bering Sea during the ice-free season. During the summer months significant walrus concentrations are found in the unconsolidated pack ice west of Point Barrow and along the northern coastline of Chukotka, Russia. As the ice edge advances southward in the fall, walruses reverse their migration and re-group in the Bering Sea ice pack. ER Walruses are an ice-dependent species that relies on floating pack ice as a substrate for resting and giving birth. Winter walrus concentrations occur in areas of broken ice, while summer concentrations tend to occur in areas of unconsolidated pack ice, usually within 100 km of the leading edge of the ice pack. Where pack ice is unavailable, walruses haul out to rest on land. Walruses are social animals and tend to travel and haul out in groups. The northern coastline of Chukotka in Russia and nearby islands are important late summer haul out sites. Although capable of diving, walruses are mainly found in shallow waters of 100 meters or less. They are not adapted to a pelagic (open ocean) existence. ER 174. The chief sources of mortality to walruses are predation by polar bears and killer whales, hunting by Natives in Alaska and Russia, and intraspecific trauma, chiefly trampling. ER 174. While noise from oil and gas exploration activities has 13

23 Case: /06/2010 ID: DktEntry: 19 Page: 23 of 74 the potential to disturb walruses, the fact that most such activities are carried out in open waters away from pack ice, are transitory and are subject to mitigation requirements means that few individual walruses are actually disturbed by such activities, and there is no evidence that any disturbance has had lasting effects on individual walruses or the species. ER C. Polar Bears. Polar bears occur throughout the Arctic, and their total population is estimated between 20,000 to 25,000 individuals. ER 175. Two polar bear stocks occur in Alaska, the Chukchi-Bering Seas stock ( CS ) and the Southern Beaufort Sea stock ( SBS ). ER 175. Because MMPA 101(a)(5)(A) requires impacts to be analyzed at the stock level, the incidental take regulations at issue here evaluated the impacts of oil and gas exploration activities on the CS and SBS stocks, the two populations present in the Chukchi Sea Region. The most recent population estimate for the CS stock is 2,000 animals, but it is not considered highly reliable. ER 175. The SBS stock is estimated with a high degree of confidence at 1,500 bears. ER 176. A small proportion of the SBS stock is found in the Chukchi Sea Region during the ice-covered season. Most of the CS stock dens in Russia. Id. Like walruses, polar bears are ice dependent and subject to the movements and coverage of the pack ice and annual ice, which they rely on as a platform for 14

24 Case: /06/2010 ID: DktEntry: 19 Page: 24 of 74 hunting. Polar bears are widely distributed within their range and are generally solitary animals. ER 176. Polar bears in the Chukchi and Bering Seas move south during fall and winter and move north in advance of receding ice in late spring and early summer. Polar bears may be encountered traveling through the Chukchi Sea area during May and June, October and November, during their northward and southward migrations. ER 177. Polar bears can swim long distances across open water, but they are not adapted to a pelagic existence, and typically remain closely associated with sea ice or coastal zones during open water season. ER 189. The most serious threats to polar bears are illegal hunting and habitat loss due to the diminishing extent, thickness, and seasonal persistence of sea ice. ER 176. Subsistence harvesting is the greatest source of human-caused mortality for adult polar bears. ER 177. While oil and gas exploration activities have the potential to disturb polar bears, evidence from past exploration, particularly in the Beaufort Sea area, indicates that any disturbances which occur are short-term, and have only minor effects on individual bears. ER D. The Service s Small Numbers and Negligible Impact Conclusions. In the preamble to the incidental take regulations, the Service analyzed first whether only small numbers of walruses and polar bears would be affected by incidental takes, and then whether it could make the required finding 15

25 Case: /06/2010 ID: DktEntry: 19 Page: 25 of 74 that such takes would have only negligible effects on these marine mammals. ER After considering all available data on likely interactions between oil and gas activities and walruses and polar bears, the Service concluded that any incidental take reasonably likely to result from the effects of the proposed activities, as mitigated through this regulatory process, will be limited to small numbers of walruses and polar bears. ER 191. The Service explained that only a small proportion of the Pacific walrus population or the Chukchi Sea and Southern Beaufort Sea polar bear populations will likely be impacted, because extensive studies have shown that only small portions of these populations are likely to be in the vicinity of contemplated activities. Id., see also ER The data also shows that contemplated activities would have a relatively small footprint and would only affect a portion of the animals that came within the vicinity of the activities. Id. The Service went on to conclude that it could make the required statutory finding that the oil and gas activities subject to the regulations would have only negligible impacts on walruses and polar bears. ER ; see also ER Based on the best available scientific information regarding the biological and behavioral characteristics of these species and the nature of likely industry activities, the Service concluded that any incidental take reasonably likely to result from the effects of oil and gas related exploration activities during the period 16

26 Case: /06/2010 ID: DktEntry: 19 Page: 26 of 74 of the rule, in the Chukchi Sea and adjacent western coast of Alaska will have no more than a negligible effect on the rates of recruitment and survival of polar bears and Pacific walruses in the Chukchi Sea Region. ER 191. E. The ESA Listing of the Polar Bear. On May 15, 2008, the Service issued a final rule listing the polar bear species as threatened under the ESA because of projected reductions in sea-ice habitat essential to the survival of the polar bear. ER The Service s ESA listing decision projected that future reductions in sea ice resulting from climate change are expected to cause a substantial decline in CS and SBS polar bear populations. ER The Chukchi Sea Incidental Take Regulations specifically reference and incorporate the analysis in the listing decision. ER The listing decision s findings regarding the effects of routine oil and gas activities in Alaska on polar bears are consistent with the findings in the incidental take regulation: Oil and gas exploration, development, and production activities do not threaten the [polar bear] species throughout all or a significant portion of its range based on: (1) mitigation measures in place now and likely to be used in the future; (2) historical information on the level of oil and gas development activities occurring within polar bear habitat within the Arctic; (3) the lack of direct quantifiable impacts to polar bear habitat from these activities noted to date in Alaska; (4) the current availability of suitable alternative habitat; and (5) the limited and localized nature of the development activities, or possible events, such as oil spills. 17

27 Case: /06/2010 ID: DktEntry: 19 Page: 27 of 74 ER 120; see also ER ( mitigative regulations that have been instituted, and will be modified as necessary, have proven to be highly successful in providing for polar bear conservation in Alaska. ). STANDARD OF REVIEW Judicial review of administrative actions taken under the MMPA and NEPA is governed by section 706 of the Administrative Procedure Act (APA), 5 U.S.C City of Sausalito v. O Neill, 386 F.3d 1186, 1205 (9 th Cir. 2004). Under the APA, a reviewing court must satisfy itself that agency decisions are not arbitrary and capricious, an abuse of discretion, or otherwise not in accordance with law. Id. at 1206 (citation omitted). Review under this standard is to be searching and careful but narrow, and a court is not to substitute its judgment for that of the agency. Marsh v. Oregon Natural Resources Council, 490 U.S. 360, 378 (1989). Under this deferential standard, a court may reverse a decision as arbitrary and capricious: only if the agency relied on factors Congress did not intend it to consider, entirely failed to consider an important aspect of the problem, or offered an explanation that runs counter to the evidence before the agency or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise. Lands Council v. McNair, 537 F.3d at 987 (citations and quote marks omitted). Deference is especially appropriate when reviewing the agency s technical analysis 18

28 Case: /06/2010 ID: DktEntry: 19 Page: 28 of 74 and judgments involving the evaluation of complex scientific data within the agency s technical expertise. Id. SUMMARY OF ARGUMENT 1. The Service concluded, based on an extensive record, that it was appropriate to authorize the incidental taking of small numbers of walruses and polar bears in connection with oil and gas exploration in the Chukchi Sea during , and in doing so made the critical statutory finding that incidental takings under the regulations would have only a negligible impact on walruses and polar bears. The Center does not challenge the negligible impact finding, but instead questions the Service s conclusion that only small numbers of marine mammals will be subject to takings. That conclusion, however, was well grounded on a record that showed that there is likely to be very little overlap between the location of the covered industry activities and the likely seasonal distribution of walruses and polar bears, meaning that few individual animals will be disturbed. Monitoring results from prior industry exploratory activities confirm that only small numbers of walruses and polar bears are generally encountered during these activities. In upholding a similar incidental take regulation for oil and gas activities in the Beaufort Sea, this Court stressed that the Service s data-based scientific predictions of this nature are entitled to our greatest deference. Kempthorne, 588 F.3d at

29 Case: /06/2010 ID: DktEntry: 19 Page: 29 of 74 The Center s assertion that the MMPA requires the Service to define small numbers in absolute terms, rather than as a portion of the particular species or stock, is entirely unsupported by the statutory language, and is contrary to clear legislative history showing that Congress recognized that the concept of small numbers is not capable of being expressed in absolute numerical limits. See H.R. Report No , 97 th Cong., 1 st Sess. 19, 1981 U.S.C.C.A.N. 1458, The Center s related contention that the MMPA requires the Service to calculate the number of animals expected to be subject to takings is equally unsupported by the statute. Congress could easily have required a numerical estimate here, as it did in other parts of the MMPA. The fact that it did not strongly supports the Service s reasonable conclusion that quantification of small numbers is not required. 2. The Center is no more successful in arguing that the ESA required the Service to specify a numerical limit for takings of polar bears in the Incidental Take Statement ( ITS ) prepared by the Service as part of the Biological Opinion under ESA Section 7. The Service provided a reasonable explanation for why it would be impracticable to set out a numerical limit in the ITS, particularly in light of uncertainties about the scope of likely industry activity and the shifting distribution of polar bears over time. The Service also provided reasonable triggers for possible re-initiation of consultation, including if any polar bear is 20

30 Case: /06/2010 ID: DktEntry: 19 Page: 30 of 74 seriously injured or killed. The Service s reliance on proven mitigation requirements, many of which were favorably cited by this Court in Kempthorne, 588 F.3d at 712, was not arbitrary or capricious. 3. The EA prepared for the regulations first considered five alternatives, but found that only two the proposed regulation and the no-action alternative were reasonable enough alternatives to require further analysis in the EA. This approach to the consideration of alternatives in an EA had been found adequate for purposes of NEPA by this Court. See Native Ecosystems Council v. U.S. Forest Service, 428 F.3d 1233, (9 th Cir. 2005) (giving detailed consideration in an EA to two alternatives no action and preferred alternative is adequate under NEPA). Finally, the EA s thorough consideration of oil spills was adequate, particularly in light of the fact that these regulations only allow takes during exploration, not development and production, over a five-year period. ARGUMENT I THE CHUKCHI SEA INCIDENTAL TAKE REGULATIONS DO NOT VIOLATE THE MMPA REQUIREMENT THAT AUTHORIZED TAKES BE FOR SMALL NUMBERS OF MARINE MAMMALS The Center argues that FWS violated the MMPA by: (1) relying on an illegal regulatory definition of small numbers that conflates it with the separate requirement of negligible impact; (2) authorizing take without estimating how 21

31 Case: /06/2010 ID: DktEntry: 19 Page: 31 of 74 many Pacific walrus and polar bears would or could be taken, thus failing to guarantee that only small numbers would be taken; and (3) rationalizing its small numbers finding based on false assumptions and bad science. Br The first two of these contentions challenge the Service s interpretation of MMPA Section 101(a)(5)(A)(i), while the third challenges the reasonableness of the Service s determination to authorize incidental takes in this case. None of these contentions has merit. As noted supra at 16-17, the Service here concluded that any incidental take reasonably likely to result from the effects of the proposed activities, as mitigated through this regulatory process, will be limited to small numbers of walruses and polar bears. ER 191. This conclusion was based on a thorough consideration of all available data regarding the likely interactions of walruses and polar bears with expected oil and gas exploratory activities over the five year period of the regulations. ER The Center s attacks on the Service s wellsupported conclusion are without basis. A. The Center Has Not Shown That the Service s Interpretation of Small Numbers Is Irrational or Clearly Contrary to the Statutory Language. The Center alleges that the Service s regulatory definition of small numbers is illegal and thus, by extension, so are the Chukchi Sea incidental take regulations. The regulatory definition, which took effect in August 1983, defines 22

32 Case: /06/2010 ID: DktEntry: 19 Page: 32 of 74 small numbers to mean a portion of a marine mammal species or stock whose taking would have a negligible impact on that species or stock. 48 Fed. Reg. 31,220, 31,225 (1983); 50 C.F.R The regulation thus defines small numbers by comparison with the species or stock as a whole, not in terms of a fixed number that is unrelated to the size of the species or stock, as the Center would prefer. Because this regulation defining small numbers has been in place for more than six years, a facial challenge to the definition is barred by the six-year statute of limitations for civil actions against the United States. 28 U.S.C. 2401(a); Sierra Club v. Penfold, 857 F.2d 1307, 1315 (9 th Cir. 1988); Wind River Mining Corp. v. United States, 946 F.2d 710, 712 (9 th Cir. 1991). To the extent that the Center s argument (see Br ) challenges the regulatory definition on its face, it is barred. The Center s challenge accordingly must be limited to the 2008 Chukchi incidental take regulations, and whether the Service s treatment of the small numbers issue in those regulations was contrary to the statute or unreasonable. The preamble to the Chukchi incidental take regulations at ER contains a thorough analysis of why only small numbers of Pacific walrus and polar bears are likely to be taken incidental to the described Industry activities relative to the 23

33 Case: /06/2010 ID: DktEntry: 19 Page: 33 of 74 number of walruses and polar bears that are expected to be unaffected by those activities (ER 188). It is that analysis which must be the focus of review here. 1. Defining Small Numbers as a Portion of the Stock or Population, Rather than as a Fixed Number Applicable to All Species, Is a Permissible Interpretation of the MMPA. This Court s review of an agency s interpretation of a statute it administers is governed by Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) ( Chevron ). If Congress has directly spoken to the precise question at issue * * * that is the end of the matter. 467 U.S. at However, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency s answer is based on a permissible construction of the statute. Id. at 843. United Food & Commercial Workers Union v. NLRB, Local 1036, 307 F.3d 760, 767 (9 th Cir. 2002) (en banc). An agency s interpretation of a statute is permissible unless it is arbitrary, capricious, or manifestly contrary to the statute. Arizona Health Care Cost Containment System v. McClellan, 508 F.3d 1243, 1253 (9 th Cir. 2007) (internal quotation marks and citations omitted). Accordingly, if a statute s language can reasonably be construed in more than one way, a court may not substitute its own construction of the statute for a reasonable interpretation made by the agency that Congress has entrusted to implement the legislation. United Food, 307 F.3d at

34 Case: /06/2010 ID: DktEntry: 19 Page: 34 of 74 The Center claims (Br ) that small numbers is an absolute limit that may not be defined in relation to population size, distribution, or other demographics. But there is nothing in the statute indicating that small numbers must be defined in a way that is unrelated to the size of the species or stock. Congress has not spoken directly to the precise question whether small numbers can be analyzed in terms of a portion of the entire species or stock, or whether it must be defined independently thereof. Small numbers in this context does not have a plain meaning that unambiguously forbids use of a proportional approach. Indeed, most people would readily accept that a small number of a species or stock like the CS or SBS stocks of polar bears that numbers in the low thousands could well be different from a small number of a species or stock like Pacific walruses that number over 200,000. If the Center s one-size fits all theory were accepted, species or stocks that have few members would receive less protection than more abundant species. It would be illogical to have an absolute limit that applied the same to every marine mammal species, no matter how abundant, and unsurprisingly there is no evidence that Congress wanted the Service to follow that approach. If there were any doubt, the legislative history of this provision of the MMPA confirms that Congress did not intend small numbers to be an absolute numerical limit. The House Report points out that the drafters of this provision 25

35 Case: /06/2010 ID: DktEntry: 19 Page: 35 of 74 recognized the imprecision of the term small numbers, but was unable to offer a more precise formulation because the concept is not capable of being expressed in absolute numerical limits. See H.R. Report No at 19, reprinted at 1981 U.S.C.C.A.N. 1458, 1469 (Sept. 16, 1981). Thus, Congress focused on the anticipated effects of the activity on the species, rather than on an absolute numerical limit, and concluded that authorization should be available to persons whose taking of marine mammals is infrequent, unavoidable, or accidental. Id. The Service s small numbers definition is wholly in step with this direction. The Center contends that, by defining the portion of a stock or species that would be a small number in terms of negligible impact, the Service s definition at 50 C.F.R renders meaningless the requirement that the Service find that the authorized incidental taking will have a negligible impact on such species or stock. That is incorrect. While the Service s definition of small numbers focuses on the portion of a species or stock that is subject to an incidental taking in comparison with the portion that is not, the finding required by Section 1371(a)(5)(A)(i)(I) focuses on impact that is, the nature of the particular takings, the severity of effects on animals, and the overall biological effect on the species or stock. The Service must make the negligible impact finding in all cases, independently of any determination that only small numbers of the species or stock will be taken. Thus, even if a proposed activity affects only a small number of 26

36 Case: /06/2010 ID: DktEntry: 19 Page: 36 of 74 animals, the Service could still finding that the taking will have more than a negligible effect on the species or stock, particularly if the impact on those particular animals is severe, or if those animals are of great importance to the species or stock. That the two inquiries are distinct is clearly shown by the record in this case. The Service s small numbers analysis focuses chiefly on the location of likely Chukchi Sea oil and gas activities in relation to the likely distribution of walruses and polar bears at the times when the activities are most likely to occur. ER , 191. The Service s negligible impact analysis, on the other hand, considers the likely effects of such interactions between industry and animals on recruitment and survival of polar bears and walruses, which is not a factor in the small numbers analysis. ER While there is some overlap between the Service s analysis of small numbers and the finding of negligible impacts, that simply reflects that the overall goal of this part of the MMPA is to assure that any authorized takings will have only negligible effects. The protective purpose of the statute would not be furthered by requiring the Service to make its small numbers inquiry without any consideration of impacts, or its impact inquiry without any consideration of numbers. The Service s negligible impact finding here was not in any way compromised by the fact that there was some overlap between the Service s 27

37 Case: /06/2010 ID: DktEntry: 19 Page: 37 of 74 analysis of the two issues, and indeed, the Center no longer challenges the Service s negligible impact finding. The Center s highly artificial attempt to force these two inquiries into airtight categories has no support in the statute and should be rejected. 2 / 2. The MMPA Does Not Require the Service to Calculate the Number of Animals Expected to be Incidentally Taken. The Center s second attack on the agency s definition of small numbers challenges the fact that the pertinent regulation does not require the Service to specify or estimate the number of animals that will be taken pursuant to a five-year incidental take rule. The Center argues (Br. 19) that [t]he plain language of the statute shows that Congress intended FWS to calculate the number of animals that would be taken. In fact, there is nothing in the language of the statute that 2 / The Center relies on a district court decision finding a purported conflict between a similar small numbers definition utilized by the National Marine Fisheries Service ( NMFS ) and a negligible impact finding in a case involving the Navy s use of low frequency sonar in 75% of the world s oceans. Natural Resources Defense Council, Inc. v. Evans, 232 F. Supp. 2d 1003, 1012 (N.D. Cal. 2002). Ruling on a preliminary injunction, that district court concluded that plaintiffs are likely to prevail on their contention that NMFS acted outside the scope of its authority in applying the definition of small numbers that appears in 50 C.F.R to the Final Rule. 232 F. Supp. 2d at Evans is, of course, not binding precedent, and in any event its ruling as to small numbers is entirely unpersuasive. Evans failed to apply the proper Chevron analysis to the question of whether the agency had properly defined the phrase small numbers. Accordingly, it never inquired as to whether Congress had resolved the precise question at issue, let alone explain why the agency definition of small numbers conflicted with an unambiguous statutory directive. 28