Drakes Bay Oyster Co. v. Jewell

The Ninth Circuit has jurisdiction to review an agency decision for abuse of discretion in allowing a mariculture permit to expire, but it does not have jurisdiction over the ultimate discretionary decision; the Secretary of the Interior did not abuse its discretion by not renewing the permit.

In 1962, Congress established the Point Reyes National Seashore, which included a series of estuarial bays known as Drakes Estero. In 1972, Johnson Oyster Company (“Johnson”) conveyed its five acres in Drakes Estero to the United States, electing to retain a reservation of use and occupancy (“ROU”) expiring November 30, 2012. In 2004, Drakes Bay Oyster Company (“Drakes Bay”) purchased Johnson’s assets, including the ROU, knowing it would soon expire. In 2009, Congress passed legislation regarding Drakes Estero, stating the “Secretary of the Interior is authorized to issue a special use permit with the same terms and conditions as the existing authorization.” After reviewing inconclusive environmental impact statements and other studies, the Secretary of the Interior did not renew Drakes Bay’s permit based on public policy reasons. Drakes Bay sought a preliminary injunction, but the district court denied the motion; Drakes Bay appealed. The Ninth Circuit first held that it had jurisdiction review whether the Secretary violated any legal mandates because it could review for an agency’s abuse of discretion. However, the panel lacked jurisdiction to review the Secretary's ultimate discretionary decision. Second, the panel held that the Secretary did not abuse its discretion because the plain language of the statute and congressional intent showed Congress gave discretional authority in issuing and renewing permits. Third, preliminary injunction was not warranted because Drakes Bay was unlikely to prevail in showing the decision was arbitrary and capricious, an abuse of discretion, or in violation of any law. Additionally, even if compliance with the National Environmental Policy Act was required, the Secretary had done adequate review and there was no evidence of prejudice against Drakes Bay. Finally, the denial of preliminary injunction was proper because Drakes Bay failed to show that the balance of equities weighed in its favor. AFFIRMED.