by Lauren Bernadett
Drakes Bay Oyster Company (DBOC) is an oyster farm located in Drakes Estero in Point Reyes National Seashore on the northern California coast. Oysters have been farmed in Drakes Estero since the 1930s. In 1964, Congress passed the Wilderness Act, which permitted the Secretary of the Interior (Secretary) to designate wilderness areas within national parks. The Wilderness Act prohibited commercial enterprise in the wilderness areas, subject to existing private rights.
Johnson Oyster Company, which operated an oyster farm in Drakes Estero, sold its land to the United States in 1972 for $79,200. Johnson also secured a reservation of use and occupancy (RUO) and a special use permit (SUP) that allowed the oyster company to continue operating on the same five acres for another forty years.
In 1976, Congress passed the Point Reyes Wilderness Act, designating parts of Point Reyes National Seashore as wilderness areas and Drakes Estero as “potential wilderness” under the Wilderness Act of 1964. Potential wilderness areas were to be subject to efforts to remove obstacles to the designation of wilderness status. Part of the current controversy is whether it was Congress’s intent for the oyster farm to be treated as an obstacle to wilderness status or as a compatible beneficial use.
In 2004, Kevin Lunny bought the oyster farm from Johnson. At the time of Lunny’s acquisition, the National Park Service (NPS) sent him a memorandum stating that the Wilderness Act, the Point Reyes Wilderness Act, and the NPS’s management policies require the NPS to convert the oyster farm area to wilderness status as soon as the farm could be eliminated. Some now posit that this action stemmed from a misinterpretation of federal law by NPS. Some years later, Section 124 of a 2009 Appropriations Act provided that the Secretary was authorized to issue a ten-year SUP to allow for the continued operation of DBOC before the current RUO and SUP expired on November 30, 2012. DBOC applied for the ten-year SUP. On November 29, 2013, the Secretary issued a memorandum stating his decision to allow the SUP to expire and to not grant DBOC’s request for a ten-year extension.
District Court – Drakes Bay Oyster Co. v. Salazar, 921 F. Supp. 2d 972 (2013)
DBOC and Lunny sought review and a preliminary injunction of the Secretary’s decision in federal court. The district court held that it lacked jurisdiction to hear DBOC’s challenge because “any agency action ‘committed to agency discretion by law[,]’” such as the decision whether to grant a new SUP, is exempt from judicial review under the Administrative Procedure Act (APA).
The court also stated that even if it did have jurisdiction, it would not grant DBOC’s request for a preliminary injunction. Its rationale was that even though DBOC could show irreparable harm, it could not demonstrate a likelihood of success on the merits because it could not show that the Secretary’s decision was “‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.’” The court reasoned that this was so because the Secretary’s decision “had a basis in law and policy, showed a ‘rational connection’ between the choices made, and was not ‘so implausible’ that differences in opinion could not account for the result.” Additionally, the court stated that the balance of the equities and the public interest did not weigh in favor of granting a preliminary injunction.
Ninth Circuit Court of Appeals – Drakes Bay Oyster Co. v. Jewell, 729 F.3d 967 (9th Cir. 2013)
DBOC appealed the district court’s decision to the Ninth Circuit Court of Appeals. The case was heard by a three judge panel. The court held that, contrary to the district court’s decision, the court did “have jurisdiction to review whether the Secretary violated any legal mandate contained in Section 124 or elsewhere.” However, the appeals court majority agreed with the district court that DBOC did not show a likelihood of success on the merits on its claim to warrant a preliminary injunction.
Judge Watford dissented, stating that DBOC is likely to prevail on the merits because the Secretary misinterpreted the Point Reyes Wilderness Act and Section 124’s effect, making his decision “arbitrary, capricious, or otherwise not in accordance with law.” Judge Watford explained the legislative history of the Point Reyes Wilderness Act. He emphasized that Congress, as well as civic, environmental, and conservation groups, did not perceive the oyster farm to be inconsistent with Drakes Estero’s original designation as wilderness. Drakes Estero was designated as “potential wilderness” in the final bill only to compromise with the Interior Department, which objected to non-conforming uses in wilderness areas.
Judge Watford stated that given this legislative history, it is bizarre that the Interior Department concluded in 2005 that “Congress had ‘mandated’ elimination of the oyster farm.” While Congress instructed the Interior Department to remove obstacles to converting “potential wilderness” into wilderness areas, no one in Congress expressed that the oyster farm was an obstacle to the conversion of Drakes Estero. Legislative history indicates “that Congress viewed the oyster farm as a beneficial, pre-existing use whose continuation was fully compatible with wilderness status.”
Judge Watford continued that Congress intended Section 124 of the Appropriations Act to override the Interior Department’s misinterpretation of the Point Reyes Wilderness Act. He stated that the Secretary, whose decision heavily depended on the Point Reyes Wilderness Act, misinterpreted the Wilderness Act and the Point Reyes Wilderness Act to assume that they prohibited the oyster farm’s continued operation. Because of these errors of statutory interpretation, Judge Watford stated that DBOC is likely to prevail on the merits of its claim. Because the other three factors required for a preliminary injunction also tip in favor of DBOC, Judge Watford would grant DBOC’s request for a preliminary injunction.
After the Ninth Circuit opinion and Judge Watford’s dissent came down on September 3, 2013, DBOC requested a rehearing in front of the full Ninth Circuit panel. Eight groups and individuals filed amicus briefs in support of DBOC. The briefs address issues including the environmental benefits of oyster culture, congressional intent to preserve the oyster farm, and economic impacts of closing DBOC. Instead of dismissing DBOC’s request, the court requested a response from the government, indicating that DBOC might have a chance to reargue its case in court. The Department of the Interior filed its response on December 2, 2013.
A version of this article originally appeared in the Winter 2013 Fisheries Law Update, published by the Fisheries Law Centre. A second version of this article appeared on the West Coast Ag & Food Law Blog.