Clark Hill Succeeds in Legal Challenge of Bureau of Reclamation NEPA Decision in Arizona

Clark Hill’s John Lemaster and Maram Salaheldin successfully represented a group of four Arizona municipalities in a federal lawsuit challenging the decision reached by the Bureau of Reclamation (“Reclamation”) in its required National Environmental Policy Act (“NEPA”) review of a proposed water transfer off the Colorado River. On Feb. 21, 2024, the Court granted summary judgment to the Plaintiffs, making a rare finding that the federal agency had violated NEPA and remanding back to Reclamation for further environmental review.

The case involves the first-ever transfer of mainstream Colorado River water, which has been used by on-river rural communities, to a town over 100 miles away in the Phoenix metropolitan area to support the town’s urban growth. To obtain this water, the town entered into a deal with the water rights holder for approximately $27 million and was required to obtain Reclamation’s approval in order to begin transferring the water. Reclamation’s required environmental review under NEPA resulted in a Finding of No Significant Impact (“FONSI”) based on what the Plaintiffs argued was a legally inadequate Environmental Assessment (“EA”). The Plaintiffs argued a higher level of review, namely an Environmental Impact Statement (“EIS”), was necessary given the potential for this transfer to have a significant effect on the environment, particularly due to the potential for this transfer to establish a precedent for future transfers.

Initially, the Court denied the Plaintiffs’ application for a preliminary injunction, finding the Plaintiffs were unlikely to succeed on the merits. However, once Reclamation’s administrative record was available, the Plaintiffs were able to refine their arguments and point to documents in the records that were not available at the preliminary injunction. As a result, the Court reversed its earlier position on key points and found that Reclamation violated NEPA by failing to conduct an EIS. Granting the Plaintiffs’ motion for summary judgment, the Court set aside the FONSI and instructed Reclamation to prepare an EIS.

“This is an important decision for these rural communities that rely on this water. It truly is their lifeblood. Without the Bureau of Reclamation taking a hard look at this, which the court said they are required to do, this would have potentially devastating effects long-term on these communities,” Lemaster said.

The case is Mohave County, et al. v. United States Bureau of Reclamation, et al., filed in the United States District Court for the District Of Arizona, Case No. 3:22-CV-08246-MTL.