In July 2012, a three-judge panel in the Ninth Circuit upheld Judge Oliver Wanger’s district court decision, finding plaintiffs did not have standing to challenge several of the water supply contracts.  As we reported here, the court concluded that plaintiffs failed to establish a causal connection between the threatened injury (harm to delta smelt) and Reclamation’s action because the water supply contracts contained a shortage provision.  The provision expressly allows Reclamation to take any action necessary to meet its legal obligations, including not delivering water to the CVP water users in order to comply with section 7 of the ESA.  The court held that, without a threatened injury, there is nothing to redress. 

The court also upheld the district court’s determination with respect to other water supply contracts that section 7 of the ESA only applies to discretionary federal actions.  The court reasoned that, under the Reclamation Act of 1902 and State Water Resources Control Board Decision 990, Reclamation must operate the CVP in conformity with California water law, which requires senior appropriative water rights to be satisfied before junior water rights.  Thus, the court held Reclamation’s discretion was limited with regard to these water contracts, and section 7 of the ESA was not triggered.