In Sierra Club v. Kenna, 2013 U.S. Dist. LEXIS 4743, *1 (January 11, 2013), the United States District Court for the Eastern District of California upheld (pdf) the Bureau of Land Management’s (BLM) grant of right-of-way over federal land, providing a wind energy project - located entirely on private land - access to a state road and other essential infrastructure. The plaintiffs challenged BLM’s action on the grounds that BLM failed to consider impacts to bird species listed under the federal Endangered Species Act (ESA) caused by the operation of the wind turbines.

A wind energy developer applied to BLM for a right-of-way over federal land for the purpose of establishing a road to service a proposed wind energy farm and installing underground power transmission lines and fiber optic communications lines. The wind farm, a 12,781-acre facility consisting of up to 102 wind turbines, would be located entirely on private land in Kern County. The wind farm was expected to result in some level of avian fatalities due to the collision with moving turbine blades, among them, the federally listed California condor (Gymnogyps californicus) and southwestern willow flycatcher (Empidonax traillii extimus).

Section 7 of the ESA imposes on all agencies a duty to consult with either the U.S. Fish and Wildlife Service (FWS) (terrestrial and freshwater fish species) or the National Marine Fisheries Service (NMFS) (anadromous fish and marine species) before engaging in any discretionary action that may affect a listed species or critical habitat. Among the actions of an agency that may constitute an "action" within the meaning of the regulation are the granting of licenses, contracts, leases, easements, rights-of-way, and permits.

In this case, BLM did not seek section 7 consultation with FWS for the wind farm’s potential effects on the condor and flycatcher because BLM determined that its scope of review must be confined to the environmental impacts of the activities within the right-of-way. BLM based its decision on the conclusion that the right-of-way approval and the wind farm were not connected because the developer could and would obtain access to the wind farm over private land should BLM deny the right-of-way application.

The court agreed. According to the court, BLM need only show that evidence existed in the administrative record to show that its determination – that the right-of-way facilities were not the "but for" cause of the wind farm – was not arbitrary, capricious, or contrary to law. The court found that facts in the record supported BLM's conclusion that the wind farm could have been completed without the benefit of BLM's grant of right-of-way. Thus, the court held that BLM’s conclusion that the right-of-way approval and the wind farm were not interdependent for purposes of the ESA, was not arbitrary, capricious, or contrary to law. BLM was, therefore, not erroneous in determining that section 7 consultation was not required for the wind farm.

The court also held that BLM’s discretion to influence the developer’s private conduct with regard to the wind farm - by conditioning the grant of right-of-way on developer concessions to benefit the listed bird species - was too tenuous to federalize the wind farm. While BLM may have some level of influence in such a situation, the court noted, the actual discretion belongs to the private party to accept the bargain or not. To explain, the court provided a remarkable analogy between a regulatory agency’s authority to place conditions on a permit and gambling: “In this court's view, agency discretion must refer to something more than the ability to play a good hand of poker.”