Drakes Bay Oyster Company challenged the Secretary of Interior’s discretionary decision to let Drakes Bay’s permit for commercial oyster farming expire according to its terms. The permit, which allowed oyster farming within the Point Reyes National Seashore was set to lapse November 2012. Drakes Bay requested an extension pursuant to section 124 of an appropriations bill that authorized the Secretary of the Interior to extend the permit for ten years. When the Secretary declined to do so, Drakes Bay sought a preliminary injunction, asserting that the Secretary’s decision violated section 124.
The district court denied the request for a preliminary injunction on the basis that the court did not possess any jurisdiction to consider the challenge to the Secretary’s decision. The court of appeal, however, concluded that the court did possess jurisdiction to consider whether the Secretary complied with the terms of section 124, but that it was not within the province of the court to intercede in the Secretary’s discretionary decision. It held that because Congress committed the substance of the Secretary’s decision to his discretion, the court could not review “the making of an informed judgment by the agency.”
The dissent strongly criticized the majority for misinterpreting the congressional authorization and ignoring the legislative history of Congress’s enactments creating the Point Reyes’ National Seashore and the wilderness designations within it. Together, the dissent argued, these clearly manifested an intent to extend the permit. The Secretary’s decision, in its view, therefore violated section 124 and was arbitrary and capricious.
The Point Reyes National Seashore was established by Congress in 1962. The enabling legislation gave the Secretary administrative authority over the area and empowered him to acquire lands, waters and other property. In 1965, the State of California conveyed all tide and submerged lands within Point Reyes to the United States—including Drakes Estero—but reserved mineral rights and the right to fish for Californians. In 1976, the Point Reyes Wilderness Act was adopted, designating certain areas within the seashore as “wilderness” under the Wilderness Act of 1964. Drakes Estero was not classified as “wilderness,” but rather “potential wilderness,” due to the ongoing commercial oyster operations, as well as the rights California had reserved in its 1965 conveyance.
Oyster farming has a long history in Point Reyes, dating back to the 1930s. The Johnson Oyster Company began operations in Drakes Estero in the 1950s. Following the sale of the acreage it possessed to the United States in 1972—and the issuance of a 40-year reservation of use and occupancy permit—oyster farming continued. Drakes Bay purchased the Johnson Oyster Company in 2004, understanding that the 40-year permit ended in November 2012.
In 2005, the Department of Interior informed Drakes Bay that neither California’s retained interest nor the existence of oyster farming precluded designation of the Point Reyes Seashore as wilderness. The Department Solicitor opined that the Wilderness Act mandated conversion of the area to wilderness as soon as non-conforming uses could be eliminated. Drakes Bay parried, obtaining special legislation in the form of section 124, providing that “notwithstanding any other provision of law, the Secretary of the Interior is authorized to issue a special use permit with the same terms and conditions as the existing authorization . . . for a period of 10 years from November 30, 2012.” The House Conference Report reflected that the final language “provid[ed] the Secretary discretion to issue a special use permit. . . .”
Drakes Bay thereafter requested that the Secretary exercise his authority under section 124 to issue a permit extension. Disputes arose between the Department and Drakes Bay over whether oyster farming had effects on the environment inconsistent with a wilderness designation. The Secretary therefore undertook a NEPA review. The resulting environmental review was inconclusive, with conflicting scientific studies supporting both the positive and potentially negative impacts of oyster farming.
The Secretary issued his decision on November 29, 2012, directing the Park Service to let the permit expire according to its terms. The decision noted the lack of consensus regarding the environmental impacts and disclaimed any reliance upon data that had been challenged as being flawed. Citing “matters of law and policy,” the Secretary stated that his ultimate conclusion was based upon the incompatibility of a commercial oyster operation within a wilderness designation.
THE APPELLATE DECISION
The threshold issue considered by the court was whether the Secretary’s action, under the provisions of section 124, was subject to judicial review at all. Disagreeing with the trial court, the court concluded that it did have jurisdiction to review whether the Secretary violated any legal restrictions or mandates contained in section 124 or elsewhere (including those in NEPA). The court concurred with the trial court, however, that it lacked jurisdiction to review the Secretary’s ultimate discretionary decision whether to issue a new permit.
The court then considered whether the Secretary had misinterpreted his authority under section 124. Contrary to Drakes Bay’s position, the court concluded that the discretion accorded the Secretary under section 124 left him free to consider wilderness values and other competing interests and to give weight to policies underlying wilderness legislation and matters of public policy relating to the 1976 Point Reyes Wilderness Act. The court also rejected arguments that the decision conflicted with NEPA. The court expressed skepticism as to whether NEPA even applied, since this had involved denial of an application. However, it found it unnecessary to decide this question, concluding that “the Secretary conducted an adequate NEPA review process and any claimed deficiencies are without consequence.” Because Drakes Bay had failed to show any probability of prevailing on the merits, the court held that the standards for a preliminary injunction had not been met.
The dissent contended that the Secretary’s decision to let the permit expire and not extend it was arbitrary and capricious in violation of the Administrative Procedure Act. It concluded that the legislative history of the series of statutes dealing with wilderness designations within Point Reyes, and the longstanding existence of oyster farming within Drakes Estero, demonstrated that Congress, in adopting section 124, had intended to override the Department of Interior’s interpretation of the Point Reyes Wilderness Act to require termination of oyster farming upon expiration of the permit.
The dissent also found that the Secretary’s decision was, in reality, a reiteration of the previous erroneous opinion expressed by the Department that the Wilderness Act required it to terminate oyster farming because it was an obstacle to conversion of Drakes Estero to wilderness status. Congress, it opined, viewed the oyster farm as a beneficial, preexisting use and felt that its continuation was fully compatible with wilderness status. The Secretary, in the dissent’s view, misinterpreted the Act and his decision—which, in effect, embodied the prior erroneous interpretation—was arbitrary and capricious.