09-03-2013 Judge Watford’s Dissenting Opinion on the Appeal to the 9th Circuit

“The government will suffer only modest harm if oyster
farming’s eighty-year history in the Estero continues a bit
longer.

But if a preliminary injunction is erroneously denied,
Drakes Bay’s business will be destroyed.

That is all Drakes Bay must show to demonstrate that the balance of equities
tips in its favor here.”

 

Appeal from the United States District Court
for the Northern District of California
Yvonne Gonzalez Rogers, District Judge, Presiding
Argued and Submitted
May 14, 2013—San Francisco, California
Filed September 3, 2013
Amended January 14, 2014

 

page 38 CO. V. JEWELL
WATFORD, Circuit Judge, dissenting:
The majority states that, by enacting § 124, “Congress did
nothing more than let the Secretary know his hands were not
tied.” Maj. op. at 24. I think Congress, by including the
“notwithstanding” clause in § 124, intended to do more than
that. In particular, it sought to override the Department of the
Interior’s misinterpretation of the Point Reyes Wilderness
Act, Pub. L. No. 94-544, 90 Stat. 2515 (1976).
The Department had concluded, in 2005, that the Act
barred issuance of a special use permit authorizing continued
operation of Drakes Bay Oyster Company’s oyster farm. The
Department thought Congress had “mandated” that result by
designating Drakes Estero, where the oyster farm is located,
as a “potential wilderness addition” in the Point Reyes
Wilderness Act. The Act’s legislative history makes clear,
however, that by divining such a mandate, the Department
simply misinterpreted the Act’s provisions and misconstrued
Congress’s intent. The Department’s misinterpretation of the
Point Reyes Wilderness Act prompted Congress to enact
§ 124 in 2009. In my view, by including a notwithstanding
clause in § 124, Congress attempted to supersede the
Department’s erroneous interpretation of the Act.
In the 2012 decision challenged here, the Secretary
nonetheless denied Drakes Bay’s permit request based
primarily on the very same misinterpretation of the Point
Reyes Wilderness Act that Congress thought it had
overridden. As a result, I think Drakes Bay is likely to
prevail on its claim that the Secretary’s decision is arbitrary,
capricious, or otherwise not in accordance with law. See
5 U.S.C. § 706(2)(A). Because the other preliminary
injunction factors also weigh in Drakes Bay’s favor,
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DRAKES BAY OYSTER CO. V. JEWELL 39
injunctive relief preserving the status quo should have been
granted here.
I
To explain why I think the Interior Department (and later
the Secretary) misinterpreted the Point Reyes Wilderness Act,
a fairly detailed discussion of the Act’s legislative history is
necessary.
The events leading up to passage of the Point Reyes
Wilderness Act begin in 1962, when Congress authorized
creation of the Point Reyes National Seashore and
appropriated funds for land acquisition within the Seashore’s
designated boundaries. Act of Sept. 13, 1962, Pub. L. No.
87-657, 76 Stat. 538 (1962). As part of that process, in 1965,
the State of California conveyed ownership of the submerged
lands and coastal tidelands within the Seashore’s boundaries
to the federal government. See Act of July 9, 1965, ch. 983,
§ 1, 1965 Cal. Stat. 2604, 2604. Those lands included Drakes
Estero. The conveyance reserved certain mineral and fishing
rights, which allowed the State to “prospect for, mine, and
remove [mineral] deposits from the lands,” and “reserved to
the people of the state the right to fish in the waters
underlying the lands.” Id. §§ 2–3, 1965 Cal. Stat. at 2605. At
the time of the State’s conveyance, oyster farming was
already a well-established fixture in Drakes Estero, with roots
dating back to the 1930s.
In 1973, the President recommended that Congress
preserve 10,600 acres within the Point Reyes National
Seashore as “wilderness,” under the terms of the Wilderness
Act of 1964, Pub. L. No. 88-577, § 3(c), 78 Stat. 890, 892
(1964). Members of California’s congressional delegation
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DRAKES BAY OYSTER 40 CO. V. JEWELL
found that recommendation woefully inadequate, and soon
thereafter introduced identical bills in the House and Senate
designating far larger areas of the Seashore as wilderness. In
the House, Congressman John Burton introduced H.R. 8002,
94th Cong. (1975); in the Senate, Senator John Tunney
introduced S. 2472, 94th Cong. (1975). H.R. 8002 is the bill
that eventually became the Point Reyes Wilderness Act.
As originally proposed, H.R. 8002 and S. 2472 would
have designated more than thirty-eight thousand acres as
wilderness. Included within that designation was Drakes
Estero, as well as most of the other submerged lands and
coastal tidelands conveyed by California in 1965. The
sponsors of H.R. 8002 and S. 2472 were well aware of the
oyster farm in Drakes Estero. They nonetheless included
Drakes Estero within the wilderness designation because they
did not view the farm’s operations as incompatible with the
area’s wilderness status. Commenting on the Senate bill,
Senator Tunney left no doubt on that score, declaring,
“Established private rights of landowners and leaseholders
will continue to be respected and protected. The existing
agricultural and aquacultural uses can continue.” Wilderness
Additions—National Park System: Hearings Before the
Subcomm. on Parks and Recreation of the S. Comm. on
Interior and Insular Affairs, 94th Cong. 271 (1976)
[hereinafter Senate Hearing].
During hearings on H.R. 8002 and S. 2472, various civic,
environmental, and conservation groups supported Drakes
Estero’s designation as wilderness. They explained in detail
why neither the State’s reserved mineral and fishing rights
nor the oyster farm precluded such a designation. No one
advocating Drakes Estero’s designation as wilderness
suggested that the oyster farm needed to be removed before
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DRAKES BAY OYSTER CO. V. JEWELL 41
the area could become wilderness. See id. at 324–33,
344–61; H.R. 7198, H.R. 8002, et al., To Designate Certain
Lands in the Point Reyes National Seashore, California as
Wilderness: Hearing Before Subcomm. on Nat’l Parks and
Recreation of the H. Comm. on Interior and Insular Affairs,
94th Cong. (1976) [hereinafter House Hearing], prepared
statements of Jim Eaton, William J. Duddleson, Ms. Raye-
Page, and Frank C. Boerger.
The comments Congress received from those who were
advocating Drakes Estero’s designation as wilderness stressed
a common theme: that the oyster farm was a beneficial preexisting
use that should be allowed to continue
notwithstanding the area’s designation as wilderness. For
example, a representative from the Wilderness Society stated:
“Within Drakes Estero the oyster culture activity, which is
under lease, has a minimal environmental and visual
intrusion. Its continuation is permissible as a pre-existing
non-conforming use and is not a deterrent for inclusion of the
federally owned submerged lands of the Estero in
wilderness.” House Hearing, prepared statement of Ms.
Raye-Page, at 6. The Chairman of the Golden Gate National
Recreation Area Citizens’ Advisory Commission noted that
the oyster-farming operations “presently carried on within the
seashore existed prior to its establishment as a park and have
since been considered desirable by both the public and park
managers.” Senate Hearing, at 361. He therefore
recommended that specific provision be made to allow such
operations “to continue unrestrained by wilderness
designation.” Id. Others observed, echoing the comments of
Senator Tunney, that the proposed House and Senate bills
already provided for that. See House Hearing, prepared
statement of William J. Duddleson, at 3–4 (“H.R. 8002 would
allow continued use and operation of Johnson’s Oyster
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DRAKES BAY OYSTER 42 CO. V. JEWELL
Company at Drakes Estero, as a pre-existing non-conforming
use.”); Senate Hearing, at 357 (“S. 2472 would allow the
continued use and operation of Johnson’s Oyster Company in
Drakes Estero.”). A local state assemblyman succinctly
summed it up this way: “Finally, I believe everyone
concerned supports the continued operation of oyster farming
in Drakes Estero as a non-conforming use.” Senate Hearing,
at 356.
The view expressed by these speakers—that continued
operation of the oyster farm was fully compatible with
Drakes Estero’s designation as wilderness —was not some
wild-eyed notion. It was firmly grounded in the text of the
Wilderness Act itself. The Act generally bans commercial
enterprise within wilderness areas, but does so “subject to
existing private rights.” 16 U.S.C. § 1133(c). Drakes Bay’s
predecessor, the Johnson Oyster Company, had existing
private rights in the form of water-bottom leases issued by
California that pre-dated both the passage of the Wilderness
Act and creation of the Point Reyes National Seashore. The
Act also generally prohibits the use of motorboats within
wilderness areas, see id., but the Secretary of Agriculture may
permit continued use of motorboats when, as here, such use
has “already become established.” Id. § 1133(d)(1). To the
extent there is any ambiguity in these provisions, the Act’s
legislative history makes clear that Congress believed the new
wilderness-preservation system would not affect the
economic arrangements of business enterprises “because
existing private rights and established uses are permitted to
continue.” S. Rep. No. 88-109, at 2 (1963).
The only party opposed to designating Drakes Estero as
wilderness was the Department of the Interior. At first, the
Department took the position that none of the submerged
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DRAKES BAY OYSTER CO. V. JEWELL 43
lands and coastal tidelands conveyed by California in 1965
could be designated as wilderness, because the State’s
reserved mineral and fishing rights were “inconsistent with
wilderness.” House Hearing, letter from John Kyl, Assistant
Secretary of the Interior, at 3. When the Department’s view
came under attack by those who argued that the State’s
reserved rights were not in any way inconsistent with
wilderness, see, e.g., Senate Hearing, at 327–28, the
Department backpedaled. It proposed placing most of the
lands subject to the State’s reserved rights into a new
legislative classification—“potential wilderness addition”—
which it had developed in connection with similar wilderness
proposals. See House Hearing, at 11–12; id., letter from John
Kyl, Assistant Secretary of the Interior, at 1. That
designation was intended to encompass “lands which are
essentially of wilderness character, but retain sufficient nonconforming
structures, activities, uses or private rights so as
to preclude immediate wilderness classification.” S. Rep. No.
94-1357, at 3 (1976).
Four areas subject to the State’s reserved rights were at
issue: the coastal tidelands, Limantour Estero, Abbotts
Lagoon, and Drakes Estero. The original version of H.R.
8002 designated all four areas as wilderness, not just potential
wilderness additions. But in the spirit of compromise,
Congressman Burton, the sponsor of H.R. 8002, agreed to
amend the bill by designating those areas as potential
wilderness additions, rather than as wilderness. See House
Hearing, prepared statement of Rep. John Burton, at 2. In
doing so, he made clear that all four areas were being
designated as potential wilderness additions due to
California’s reserved mineral and fishing rights. See id. He
noted that, “[a]s ‘potential wilderness,’ these areas would be
designated as wilderness effective when the State ceeds [sic]
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DRAKES BAY OYSTER 44 CO. V. JEWELL
these rights to the United States.” Id. (emphasis added). As
so amended, H.R. 8002 was enacted as the Point Reyes
Wilderness Act in 1976.
Fast forward now to 2005. Shortly before Drakes Bay’s
purchase of the oyster farm closed, the Park Service reiterated
its view that, based on a legal analysis performed by the
Interior Department, no new permits authorizing oyster
farming in Drakes Estero could be issued. The Department’s
legal analysis concluded—bizarrely, given the legislative
history recounted above—that by designating Drakes Estero
as a potential wilderness addition in the Point Reyes
Wilderness Act, Congress had “mandated” elimination of the
oyster farm. The Department never identified anything in the
text of the Act to support that view; it cited only a passage
from the House Report accompanying H.R. 8002. But that
passage “is in no way anchored in the text of the statute,”
Shannon v. United States, 512 U.S. 573, 583–84 (1994), and
thus provides no support for the Department’s interpretation
of the Act.
Even taken on its own terms, however, the passage from
the House Report does not support the Department’s
interpretation. The passage states in full: “As is well
established, it is the intention that those lands and waters
designated as potential wilderness additions will be
essentially managed as wilderness, to the extent possible, with
efforts to steadily continue to remove all obstacles to the
eventual conversion of these lands and waters to wilderness
status.” H.R. Rep. No. 94-1680, at 3 (1976) (emphasis
added). But the oyster farm was not an “obstacle” to Drakes
Estero’s conversion to wilderness status, and no one in
Congress ever expressed that view. To the contrary, as
discussed above, all indications are that Congress viewed the
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DRAKES BAY OYSTER CO. V. JEWELL 45
oyster farm as a beneficial, pre-existing use whose
continuation was fully compatible with wilderness status.
II
With that background in mind, we can now turn to the
legal issue at the heart of this appeal, which is how to
construe § 124.
Everyone appears to agree that the Park Service’s
conclusion in 2005 that it was legally prohibited from
granting Drakes Bay a special use permit prompted Congress
to enact § 124. If all Congress had wanted to do was “let the
Secretary know his hands were not tied,” as the majority
asserts, § 124 could simply have stated, as it does, that “the
Secretary of the Interior is authorized to issue a special use
permit . . . .” Act of Oct. 30, 2009, Pub. L. No. 111-88,
§ 124, 123 Stat. 2904, 2932. But Congress went further and
added a notwithstanding clause, so that the statute as enacted
reads, “notwithstanding any other provision of law, the
Secretary of the Interior is authorized to issue a special use
permit . . . .” Id. (emphasis added). Our task is to determine
what effect Congress intended the notwithstanding clause to
have.
Given the historical backdrop against which § 124 was
enacted, I think Congress intended the clause to override the
Interior Department’s misinterpretation of the Point Reyes
Wilderness Act. Reading the clause in that fashion is
consistent with the way courts have typically construed
notwithstanding clauses. The Supreme Court has held that
the use of such a clause “clearly signals the drafter’s intention
that the provisions of the ‘notwithstanding’ section override
conflicting provisions of any other section.” Cisneros v.
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DRAKES BAY OYSTER 46 CO. V. JEWELL
Alpine Ridge Grp., 508 U.S. 10, 18 (1993). And we have said
that the basic function of such clauses is to “sweep aside” and
“supersede” any potentially conflicting laws. United States
v. Novak, 476 F.3d 1041, 1046 (9th Cir. 2007) (en banc);
Student Loan Fund of Idaho, Inc. v. U.S. Dep’t of Educ.,
272 F.3d 1155, 1166 (9th Cir. 2001). A notwithstanding
clause often targets those laws that were the “legal sticking
point” for the action Congress intends to authorize.
Miccosukee Tribe of Indians of Fla. v. U.S. Army Corps of
Eng’rs, 619 F.3d 1289, 1301 n.19 (11th Cir. 2010).
In this case, no conflicting laws actually prevented the
Secretary from issuing a permit to Drakes Bay. Continued
operation of the oyster farm is fully consistent with the
Wilderness Act, and the farm’s existence is therefore not an
“obstacle” to converting Drakes Estero to wilderness status as
directed by the Point Reyes Wilderness Act. Instead, it was
the Interior Department’s misinterpretation of the Point
Reyes Wilderness Act that proved to be the “legal sticking
point” here. I think the best reading of the notwithstanding
clause is that Congress meant to “override” (“sweep aside,”
“supersede”) that misinterpretation of the law when it enacted
§ 124. Alpine Ridge Grp., 508 U.S. at 18; Novak, 476 F.3d at
1046; Student Loan Fund, 272 F.3d at 1166.
If you accept what I have said so far, only two questions
remain. The first is whether Congress, having overridden the
Department’s misinterpretation of the Point Reyes
Wilderness Act, nonetheless authorized the Secretary to rely
on that misinterpretation as a basis for denying Drakes Bay a
permit. I cannot see any reason why we would construe
§ 124 in that fashion. Under the Administrative Procedure
Act (APA), if an agency bases its decision on a legally
erroneous interpretation of the controlling statute, its decision
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DRAKES BAY OYSTER CO. V. JEWELL 47
will be deemed arbitrary, capricious, or otherwise not in
accordance with law. See Safe Air for Everyone v. EPA,
488 F.3d 1088, 1091, 1101 (9th Cir. 2007) (involving an
erroneous interpretation of a state implementation plan that
had the force and effect of federal law). Thus, even without
the notwithstanding clause, it would make no sense to assume
that Congress authorized the Secretary to base his decision on
a misinterpretation of the Point Reyes Wilderness Act. With
the clause, adopting any such construction of § 124 would be
entirely indefensible.
The second (and admittedly closer) question is whether
the Secretary in fact based his decision on the
misinterpretation of the Act that Congress intended to
override by enacting § 124. The majority suggests that the
Secretary based his decision instead on the Interior
Department’s own policies, see Maj. op. at 20 & n.5, 27–28
n.8, but I do not think the Secretary’s written decision
denying the permit supports that view. The Secretary’s
decision states that he gave “great weight” to what he called
“the public policy inherent in the 1976 act of Congress that
identified Drakes Estero as potential wilderness.” The
Secretary read that Act as expressing Congress’s intention
that all “obstacles” to converting Drakes Estero to wilderness
status should be removed. But he erroneously deemed the
oyster farm to be such an obstacle (“DBOC’s commercial
operations are the only use preventing the conversion of
Drakes Estero to designated wilderness”), because he
erroneously assumed that the oyster farm’s continued
operation was “prohibited by the Wilderness Act.” That in
turn led him to conclude— again erroneously—that his
decision to eliminate the oyster farm “effectuate[d]”
Congress’s intent as expressed in the Point Reyes Wilderness
Act.
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DRAKES BAY OYSTER 48 CO. V. JEWELL
These are precisely the same errors of statutory
interpretation the Interior Department made back in 2005.
They are precisely the same errors that prompted Congress to
enact § 124 in the first place. And, in my view, they are
precisely the same errors Congress attempted to supersede by
inserting the notwithstanding clause. Contrary to the
majority’s assertion, the Secretary had no authority to rely on
this misinterpretation of “Congress’s earlier expressed goal”
because the notwithstanding clause eliminated any such
authority. See Maj. op. at 27–28 n.8.
What does the majority offer in response to this analysis?
Some hand waving, to be sure, but nothing of any substance.
Most tellingly, the majority never attempts to argue that the
Interior Department’s interpretation of the Point Reyes
Wilderness Act was correct. Nor could it make that
argument with a straight face given the Act’s clear legislative
history, which the majority never attempts to address, much
less refute. The majority thus has no explanation for
Congress’s inclusion of the notwithstanding clause in § 124
other than the one I have offered: that it was included to
override the Department’s misinterpretation of the Point
Reyes Wilderness Act. The majority claims that the clause
“has a clear function—to convey that prior legislation should
not be deemed a legal barrier” to permit issuance. See Maj.
op. at 20. But that reading of the clause supports my position
because the Secretary did treat “prior legislation”—namely,
the Point Reyes Wilderness Act—as a “legal barrier” to
permit issuance. As I have argued, that is exactly what the
notwithstanding clause was intended to prohibit.
The majority also claims that I have not accorded the
Secretary’s decision the deference it is owed under the
arbitrary and capricious standard, which requires us to give
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DRAKES BAY OYSTER CO. V. JEWELL 49
due regard to an agency’s exercise of discretion within its
sphere of expertise. See Maj. op. at 27–28 n.8. But I am not
arguing here that the Secretary’s decision must be set aside
because it reflects faulty weighing of permissible policy
factors. We would have no authority to second guess a
decision of that order. What I am saying, instead, is that
§ 124’s notwithstanding clause precluded the Secretary from
basing his decision on the very misinterpretation of the Point
Reyes Wilderness Act that Congress intended to override. A
decision will normally be deemed arbitrary and capricious if
an agency “has relied on factors which Congress has not
intended it to consider.” Motor Vehicle Mfrs. Ass’n v. State
Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). That,
unfortunately, is just what the Secretary did.
In short, I would hold that Drakes Bay is likely to prevail
on the merits of its APA claim. The Secretary’s
misinterpretation of the Point Reyes Wilderness Act, and his
mistaken view that denying the permit request effectuated
Congress’s intent, were “fundamental” to his decision,
rendering the decision “arbitrary, capricious, or otherwise not
in accordance with law.” Safe Air for Everyone, 488 F.3d at
1101 (internal quotation marks omitted).
III
Like the majority, I will not spend much time addressing
the remaining preliminary injunction factors—irreparable
harm, balance of the equities, and the public interest. See
Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 20
(2008). Considered together, those factors tip in Drakes
Bay’s favor.
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DRAKES BAY OYSTER 50 CO. V. JEWELL
Drakes Bay will suffer irreparable injury to its business
and real-property rights if a preliminary injunction is
erroneously denied. See, e.g., Sundance Land Corp. v. Cmty.
First Fed. Sav. & Loan Ass’n, 840 F.2d 653, 661 (9th Cir.
1988); Am. Passage Media Corp. v. Cass Commc’ns, Inc.,
750 F.2d 1470, 1474 (9th Cir. 1985). The loss of “an ongoing
business representing many years of effort and the livelihood
of its [owners] constitutes irreparable harm.” Roso-Lino
Beverage Distribs., Inc. v. Coca-Cola Bottling Co., 749 F.2d
124, 125–26 (2d Cir. 1984) (per curiam).
The balance of equities favors Drakes Bay. The majority
concludes otherwise by noting that Drakes Bay knew when it
acquired the oyster farm that its permit would expire in 2012.
Maj. op. at 37. But that is not the relevant consideration.
Rather, the controlling consideration is that the harm Drakes
Bay will suffer from the erroneous denial of a preliminary
injunction far outweighs the harm the government will suffer
from an erroneous grant of such relief. See Alliance for the
Wild Rockies v. Cottrell, 632 F.3d 1127, 1137–38 (9th Cir.
2011); Scotts Co. v. United Indus. Corp., 315 F.3d 264, 284
(4th Cir. 2002); Am. Hosp. Supply Corp. v. Hosp. Prods. Ltd.,
780 F.2d 589, 593 (7th Cir. 1986); Roso-Lino, 749 F.2d at
126. The government will suffer only modest harm if oyster
farming’s eighty-year history in the Estero continues a bit
longer. But if a preliminary injunction is erroneously denied,
Drakes Bay’s business will be destroyed. That is all Drakes
Bay must show to demonstrate that the balance of equities
tips in its favor here.
Finally, the public interest favors neither side. As the
district court observed, federal judges are ill equipped to
weigh the adverse environmental consequences of denying a
preliminary injunction against the consequences of granting
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DRAKES BAY OYSTER CO. V. JEWELL 51
such relief, or the relative interests in access to Drakes Bay’s
oysters as opposed to unencumbered wilderness. It is the
equities that carry the day in this case, see Nken v. Holder,
556 U.S. 418, 435 (2009) (when the United States is a party,
equities and the public interest merge), and the equities
strongly favor Drakes Bay.

 

For the entire amended opinion 13-15227_order_amended_opinion

Posted by Jane Gyorgy on April 19, 2014

https://oysterzone.wordpress.com/2014/04/19/09-03-2013-judge-watfords-dissenting-opinion-on-the-appeal-to-the-9th-circuit/