Free Administrative Record - Defendants Response Brief - District Court of Colorado - Colorado

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 04-cv-1071-AP (JLK) SAN LUIS VALLEY ECOSYSTEM COUNSEL [sic], NANCY ALBRIGHT, JAMES MARTIN, JERRE GUTHALS, STEVE LEWIS, ANTLERS RIO GRANDE LODGE, INC., a Colorado Corporation, and CHARLES C. POWERS, Plaintiffs, v. UNITED STATES FOREST SERVICE, Defendant. and ALXCHNG, LLC, a Texas limited liability company, CNXCHNG, LLC, a Texas limited liability company, and RIO OXBOW RANCH, INC., a Colorado corporation, Defendant-Intervenors.

DEFENDANT'S RESPONSE TO PLAINTIFFS' INITIAL BRIEF

WILLIAM J. LEONE United States Attorney TERRY FOX ROXANE J. PERRUSO Assistant United States Attorneys 1225 Seventeenth Street, Suite 700 Denver, CO 80202 Telephone: (303) 454-0100 [email protected] [email protected] Attorneys for the Defendant, United States Forest Service

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Of Counsel Diane M. Connolly Deputy Regional Attorney United States Department of Agriculture Office of the General Counsel 730 Simms Street, Room 309 Golden, CO 80401

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TABLE OF CONTENTS Page No. LIST OF ACRONYMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A. Brief History of the Exchange and the Properties in the Exchange . . . . . . . . . . . . 2 1. 2. The Acquisition of Parcels B3 and B4 Was Not Arbitrary . . . . . . . . . . . . 3 Including Parcels L1, L2, L3, L4 and L5 and LR1, LR2, LR 3, LR4 and LR5 in the Exchange Was Not Arbitrary . . . . . . . . . . . . . 4 Inclusion of Parcels N3, N4, N5 and N6 Was Not Arbitrary . . . . . . . . . . . 6 Inclusion of Parcels N1 and N2 Was Not Arbitrary . . . . . . . . . . . . . . . . . . 7 Inclusion of the Carson Parcels Was Not Arbitrary . . . . . . . . . . . . . . . . . . 8

3. 4. 5. B. C. D. E. F. G.

Notice and Comment on the proposed Exchange . . . . . . . . . . . . . . . . . . . . . . . . . 9 Environmental Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Decision Notice and Finding of No Significant Impact . . . . . . . . . . . . . . . . . . . . 10 Plaintiffs' Administrative Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Exchange Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Plaintiffs' Opposition to the Exchange and Procedural Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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III. STATUTORY AND REGULATORY FRAMEWORK . . . . . . . . . . . . . . . . . . . . . . . . . . 16 A. STANDARD AND SCOPE OF REVIEW UNDER THE ADMINISTRATIVE PROCEDURE ACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 FOREST SERVICE MANAGEMENT OF LANDS IN THE NATIONAL FORESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 1. The Forest Service's Discretion Vis-a-Vis Land Exchanges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 The Land Exchange Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

B.

2. C.

OVERVIEW OF THE NATIONAL ENVIRONMENTAL POLICY ACT . . . . . . . . . . . . . . 22

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 I. PLAINTIFFS' NATIONAL ENVIRONMENTAL POLICY ACT CLAIM MUST FAIL BECAUSE THE FOREST SERVICE ACTED REASONABLY AND CONSISTENT WITH APPLICABLE LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 A. The Forest Service's Conclusion that an EIS was Not Required was Neither Arbitrary Nor Capricious . . . . . . . . . . . . . . . 24 The Environmental Assessment and Decision Notice Properly Analyzed Other Alternatives and Provided Sufficient Due Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 1. The Forest Service Considered Alternatives to the Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 The Public Was Afforded the Notice and an Opportunity to Comment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

B.

2.

II.

PLAINTIFFS FEDERAL LAND POLICY MANAGEMENT CHALLENGES FAIL BECAUSE THE FOREST SERVICE ACTED CONSISTENTLY WITH APPLICABLE LAW AND ITS ACTIONS WERE , THEREFORE , NOT ARBITRARY AND CAPRICIOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

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A.

Plaintiffs Lack Standing to Challenge the Valuation of the Parcels in the Exchang . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 1. 2. 3. Plaintiffs Lack Constitutional Standing. . . . . . . . . . . . . . . . . . . . 39 Plaintiffs Lack Prudential Standing. . . . . . . . . . . . . . . . . . . . . . . 40 Standing is not available under the APA because FLPMA precludes judicial review of the valuation of the parcels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

B.

Plaintiffs' FLPMA Claims Also Fail on the Merits, As FLPMA Does Not Require that Exchanged Lands Be of Equal Value; The Statute Permits Equalization . . . . . . . . . . . . . . . . . . . . 43 1. The Appraisal Properly Values Parcels N1 and N2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 The Carson Properties Were Properly Evaluated . . . . . . . . . . . . . 44 The Appraisal Properly Assessed all Parcels in the Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

2. 3.

III.

THE FOREST SERVICE DID NOT ACT ARBITRARILY AND CAPRICIOUSLY WHEN IT RELIED UPON THE OPERATIVE STATUTES AND ACTED CONSISTENTLY WITH THE FOREST PLAN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 A. The Forest Service Properly Considered the Land Adjustment Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 The Forest Service Has Not Violated Scenic Integrity Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Wildlife winter range management prescriptions were properly assessed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Recreational value and local impacts were evaluated properly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 The Economic Impacts of the Exchange were Given Due Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 iii

B.

C.

D.

E.

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IV.

PLAINTIFFS FAILED TO EXHAUST ISSUES THEY NOW SEEK TO IMPROPERLY ADD TO THIS APA APPEAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 A. Plaintiffs' Present MIS Challenges Were Not Properly Raised in the Administrative Process . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Plaintiffs' Current Critiques of the Appraisal Process Were Not Properly Preserved for Review by this Court. . . . . . . . . . . . . . 63

B.

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 CERTIFICATE OF SERVICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

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LIST OF ACRONYMS Acronym APA AR BA BE CDOW CEQ EA EIS ESA FLEFA FLPMA FOIA FONSI FSH/FSM NEPA NFMA MIS MUSY UASFLA Word Administrative Procedures Act Administrative Record Biological Assessment Biological Evaluation Colorado Division of Wildlife Council on Environmental Quality Environmental Assessment Environmental Impact Statement Endangered Species Act Federal Land Exchange Facilitation Act Federal Land Policy Management Act Freedom of Information Act Finding of No Significant Impact Forest Service Handbook/Forest Service Manual National Environmental Policy Act National Forest Management Act Management Indicator Species Multiple-Use Sustained-Yield Act Uniform Appraisal Standards for Federal Land Acquisition iii

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TABLE OF AUTHORITIES FEDERAL CASES Page No. Allen v. Wright, 468 U.S. 737 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Amoco Oil Co. v. Environmental Prot. Agency, 959 F. Supp. 1318 (D. Colo. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138 (10th Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 55 Bar MK Ranches v. Yuetter, 994 F.2d 735 (10th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Bastek v. Federal Crop Ins. Corp., 145 F.3d 90 (2d Cir.), cert. denied, 525 U.S. 1016 (1998) . . . . . . . . . . . . . . . . . . . . 62, 63 Bennett v. Spear, 520 U.S. 154 (1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 Califano v. Sanders, 430 U.S. 99 (1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 California v. Norton, 311 F.3d 1162 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Camp v. Pitts, 411 U.S. 138 (1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 23, 24 Citizens' Committee to Save Our Canyons v. United States Forest Serv., 297 F.3d 1012 (10th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Committee to Preserve Boomer Lake v. Department of Transp., 4 F.3d 1543 (10th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 iv

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Edmonds Inst. v. Babbitt, 42 F. Supp. 2d 1 (D.D.C. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Entertainment Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211 (9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24, 55 Essence, Inc. v. City of Fed. Heights, 285 F.3d 1272 (10th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Ferry v. Udall, 336 F.2d 706 (9th Cir. 1964) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 Florida Power & Light Co. v. Lorion, 470 U.S. 729 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Forest Guardians v. United States Forest Serv., 329 F.3d 1089 (9th Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Fund for Animals, et al. v. Williams, 245 F. Supp. 2d 49 (D.D.C. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Gleichman v. United States Dep't of Agric., 896 F. Supp. 42 (D. Me. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Harline v. Drug Enforcement Admin., 148 F.3d 1199 (10th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Headwaters, Inc. v. Bureau of Land Mgm't, 914 F.2d 1174 (9th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Hormel v. Helvering, 312 U.S. 552 (1941) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 30 Kleissler v. United States Forest Serv., 183 F.3d 196 (3d Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61-63 Lewis v. Glickman, 104 F. Supp. 2d 1311 (D. Kan. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 62 Lewis v. Hickel, 427 F.2d 673 (9th Cir. 1970) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 v

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Lodge Tower Condominium Ass'n v. Lodge Props., Inc., 880 F. Supp. 1370 (D. Colo. 1995), aff'd, 85 F.3d 476 (10th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 40, 41 Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Lujan v. National Wildlife Fed'n, 497 U.S. 871 (1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 McGee v. United States, 402 U.S. 479 (1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 McQueen v. United States, 179 F.R.D. 522 (S.D. Tex. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Norton v. Southern Utah Wilderness Alliance, 542 U.S. 55, 124 S. Ct. 2373 (2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Phillips v. Calhoun, 956 F.2d 949 (10th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Presidio Golf Club v. Nat'l Park Serv., 155 F.3d 1153 (9th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27, 28 Purthill v. Harris, 658 F.2d 134 (3rd Cir. 1981 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Rivera v. United States Postal Serv., 830 F.2d 1037 (9th Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Robertson v. Methow Valley Citizens Council, 490 U.S. 332 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 33 Schwarz v. FBI, No. 2:98-cv-86C, slip op. at 2 (D. Utah. Feb. 26, 1998), aff'd, 161 F.3d 18 (10th Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36n Sellas v. Kirk, 200 F.2d 217 (9th Cir. 1952) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

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Sierra Club v. Robertson, 28 F.3d 753 (8th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Sierra Club v. Young Life Campaign, Inc., 176 F. Supp. 2d 1070 (D. Colo. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Silverton Snowmobile Club v. United States Forest Serv., 433 F.3d 772 (10th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim Sims v. Apfel, 530 U.S. 103, 120 S. Ct. 2080 (2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Southern Utah Wilderness Alliance v. Dabney, 7 F. Supp. 2d 1205 (D. Utah 1998), rev'd in part on other grounds by 222 F.3d 819 (10th Cir. 2000) . . . . . . . . . . . . . . 32, 33 Steinberg v. United States Dep't of Justice, 23 F.3d 548 (D.C. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Utah Shared Access Alliance v. United States Forest Serv., 288 F.3d 1205 (10th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37, 38 Utahns for Better Transp., Inc. v. United States Dep't of Transp., 305 F.3d 1152 (10th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Valley Forge Christian Coll. v. Americans United for Separation of Church & State, Inc., 454 U.S. 464 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39, 41 Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Warth v. Seldin, 422 U.S. 490 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Westlands Water Dist. v. United States Dep't of Interior, 376 F.3d 853 (9th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Wilderness Watch & Public Employees for Envt'l Responsibility v. Mainella, 375 F.3d 1085 (11th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

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Wilson v. Hodel, 758 F.2d 1369 (10th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11, 30

STATE CASES State v. McDonald, 352 P.2d 343 (Ariz. 1960) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 UNPUBLISHED CASE Albuquerque v. United States Dep't of Interior, No. 02-2214, 2004 WL 1664211 (July 27, 2004, 10th Cir. N.M.) . . . . . . . . . . . . . . 39, 42

FEDERAL STATUTES 2 U.S.C. § 4332(2)(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 3 U.S.C. § 1716(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42 5 U.S.C. § 552 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35, 37 5 U.S.C. §§ 701-06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 39, 40 5 U.S.C. § 706(2)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16, 23 6 U.S.C. § 485. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 7 U.S.C. § 6912(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60, 61, 63 16 U.S.C. § 1604(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 16 U.S.C. §§ 1600-87 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 16 U.S.C. §§ 528-31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 42 U.S.C. §§ 4321-4334 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 21, 22, 25 43 U.S.C. § 1701 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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43 U.S.C. § 1716 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19, 21 FEDERAL REGULATIONS 36 C.F.R. pt 21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 36 C.F.R. part 215 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22, 61 36 C.F.R. part 219 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 36 C.F.R. part 254 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 36 C.F.R. § 215.11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 36 C.F.R. § 215.13(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 36 C.F.R. § 215.14(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 15, 16, 61 36 C.F.R. § 215.15(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 36 C.F.R. § 215.21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 36 C.F.R. § 219.1(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 36 C.F.R. § 219.14(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 36 C.F.R. § 254.13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21, 22 36 C.F.R. § 254.14(a)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12, 22 36 C.F.R. § 254.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18, 19, 20, 21 36 C.F.R. § 254.4(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 36 C.F.R. § 254.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 36 C.F.R. § 254.9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim 36 C.F.R. § 254.14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 36 CFR §§ 254.1-254.17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 ix

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36 C.F.R. § 264.9(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 40 C.F.R. § 1501.4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23, 24, 25, 32 40 C.F.R § 1508.18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 40 C.F.R. § 1508.27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim

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Defendant, the United States Department of Agriculture Forest Service (the "Forest Service"), by and through its undersigned counsel, opposes Plaintiffs' Initial Brief (Docket ("Doc.") #82) as follows. I. INTRODUCTION This case involves a challenge to a Forest Service proposal to exchange certain Forest Service real property for privately-held property. The proposed exchange includes a payment of money to equalize the values of the lands exchanged, because the appraisals of the lands proposed for exchange established that the value of the private lands exceeded the value of the Forest Service lands. Further, in analyzing the properties initially proposed for exchange, certain properties were excluded, some because of contamination issues and others in an effort to equalize the value of the lands exchanged. Plaintiffs, who participated in the administrative process and raised some, but not all, of the challenges they now ask this Court to address, oppose the exchange. They claim that the exchange violates the Federal Land Policy Management Act ("FLPMA"), 43 U.S.C. § 1701 et seq., and the National Environmental Policy Act ("NEPA"), 42 U.S.C. §§ 4321-4334.1 See Second Amended Complaint at ¶¶34-64, Doc. #42; Plaintiffs' Initial Brief ("Pl Br."), Doc. #82. The Forest Service denies that it has violated these statutes and asks this Court to defer to the agency's considerable discretion concerning the management, and sale, of Forest Service lands.

Plaintiffs cite to the National Forest Management Act ("NFMA") as well, but purport to advance their NFMA issues as FLPMA claims. See Second Amended Complaint, Doc. #42, ¶¶34-64. This response addresses the issue as if NFMA was plead. See infra § III, p. 48-60. 1

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II. BACKGROUND A. Brief History of the Exchange and the Properties in the Exchange

Plaintiffs challenge the Rio Oxbow Land Exchange (the "Exchange").2 (Administrative Record ("AR") at 2777-90, Doc. #5, #62, and #80.) The lands at issue, located in Mineral, Rio Grande and Hinsdale Counties, Colorado, are described below. Infra § I.A.1-6, pp. 3-8 (AR5-7, 28-33.) Alan Lisenby, a principal of Intervenor ALXCHNG, LLC, first approached the Forest Service in 1997 with an exchange proposal and that proposal was rejected. (AR38.) In 1999, Lisenby and Charles Nearburg, a principal of Intervenor CNXCHNG, LLC, submitted a more comprehensive exchange proposal, which included federal acquisition of the Carson properties. (AR41, 2755.) The Carson properties were, at that time, a priority for Forest Service acquisition. (AR2755.) Some of the Carson properties were later removed from the Exchange because of contamination issues, but components of the Exchange remained attractive to the Forest Service. (AR13, 38, 41.) Indeed, when the contaminated properties dropped out of the Exchange, the proponents sweetened the proposal by adding the Nicomodes/Bonafacio properties. (AR38.) As explained below, the Bonafacio properties are very attractive to the Forest Service because they are in-holdings that are bordered by Forest Service lands on all four sides.

The Forest Service rejected Lisenby's 1997 exchange proposal. The AR does not contain a written rejection. Typically informal inquiries are rejected verbally. Lisenby and Nearburg later submitted a formal and more comprehensive exchange proposal to the Forest Service in 1999, which made it past the informal screening process. (AR38.) 2

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On January 24, 2001, the parties entered into a non-binding agreement to exchange certain properties. The 2001 agreement was amended on October 16, 2002. The amended agreement proposed that the Forest Service and the private parties initiate an Exchange (the "proposed Exchange") with changes to the properties originally identified. (AR2407-18.) In its final form, the Exchange involves transferring federal properties N1-N6 and L1-L5 for non-federal properties B3, B4, LR1-LR5, and portions of the Carson Properties. 1. The Acquisition of Parcels B3 and B4 Was Not Arbitrary

Parcels B1, B2, B3, and B4 are privately owned parcels that were all included in the initial proposed exchange. These privately owned parcels are wholly surrounded by Forest Service land, which can create administrative issues for the Forest Service. (AR1463, 24, 36-37, 207.) See Lodge Tower Condominium Ass'n v. Lodge Props., Inc., 880 F. Supp. 1370, 1378 (D. Colo. 1995) (noting Forest Plan that placed priority on federal acquisition of privately-held realty lying within wilderness areas), aff'd, 85 F.3d 476 (10th Cir. 1996). Marking boundaries of Forest Service land and guarding against trespass is an administrative burden. (AR1463.) If the number of miles of boundary can be reduced, that reduces the administrative burden. Id. For that reason, the prospect of bringing the four parcels of private land designated as B1, B2, B3, and B4, the Bonafacio parcels, into federal ownership was an attractive proposition. (AR47; AR32.)

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Although all four Bonafacio parcels were part of the original proposal that was evaluated in the EA, the expense associated with acquisition of B1 and B2 resulted in their removal from the Exchange.3 (AR3,4, 6-7, 2184, 2277-84.) Even without B1 and B2 as part of the Exchange, the prospect of acquiring B3 and B4 interested the Forest Service. (AR6-7, 2184.) Accordingly, the Forest Service and the non-federal parties continued to work to identify parcels that would be part of the Exchange. 2. Including Parcels L1, L2, L3, L4 and L5 and LR1, LR2, LR 3, LR4 and LR5 in the Exchange Was Not Arbitrary

The federal government currently owns a zig-zag pattern of lands just to the southwest of Route 149 and the Rio Grande River (the "River") on the Rio Grande National Forest and four

While not relevant to Plaintiffs' challenges, it is interesting that although parcels B1 and B2 dropped out of this Exchange, the Forest Service later acquired B1 and B2 in a separate transaction. 4

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parcels ­ L1, L2, L3, and L4 ­ on the north side of the River totaling 18.74 acres. (AR28.) In order to smooth out the federal boundary, the Exchange includes parcels L1 to L5, consisting of 238.86 acres of property on that side of the highway. (Id.) In the Exchange, the Forest Service would trade parcels LR1, LR2, LR3, LR4 and LR5, on the north side of the River and the highway which are currently privately owned (called the "Long Ridge" properties). (AR28.) These properties total 91.79 acres.

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3.

Inclusion of Parcels N3, N4, N5 and N6 Was Not Arbitrary

Parcels N3, N4, N5 and N6 are part of the lands the Forest Service was willing to provide in order to obtain the non-federal parcels at issue in the Exchange. (AR29, 371.) N3 is a triangular shaped parcel with two sides abutting private lands. (Id.) N3 was later dropped from the Exchange. N4 is a rectangular piece with three sides abutting private property. (Id.) N5 is an odd shaped parcel with five sides abutting private property. (Id.) Parcel N6 has two sides adjoining private property and part of the third side abutting onto private property. (Id.) A quick look at the map of these properties shows how their removal from federal ownership simplifies federal/private land boundaries in this area. Parcels N4, N5 and N6 total 112.1 acres.

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4.

Inclusion of Parcels N1 and N2 Was Not Arbitrary

The Exchange calls for the Forest Service to divest itself of parcels N1 and N2. (AR30.) The thrust of Plaintiffs' argument regarding these parcels is that the Exchange cannot be in the public interest because it has resulted in damage to the value of Antlers Lodge by placing federal lands adjacent to the lodge in the private hands of Antlers' competitor. (Pl. Br. at 9, ¶1.) Plaintiffs mistakenly believe that the Forest Service's duty is to protect the value of privately held lands. (See AR1433.) Because the Forest Service has no duty to protect private property values, any unintended alleged impacts on an individual member of the public do not outweigh the overall value to the public as a whole.

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5.

Inclusion of the Carson Parcels Was Not Arbitrary

The final parcels of property that are part of the Exchange are the Carson parcels. Originally, the Forest Service proposed to acquire more of the Carson properties, but parcels with contaminated land were appropriately excluded from the Exchange. (AR33.)

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Originally, the Forest Service was interested in acquiring the Carson mining claims for their historic value. (AR41, 2755.) Indeed, these properties were one of the Forest Service's top acquisition priorities. (AR2219, 2755, 2937). Contamination on certain properties removed several parcels from the Exchange. (AR13, 28-41.) B. Notice and Comment on the proposed Exchange

Announcements of the proposed Exchange were published in local newspapers and sent to community members and elected officials. (AR295-310, 1079-1175.) Interested parties were invited to submit comments to the Rio Grande National Forest for a period of 45 days. (Id.) The Forest Service received 95 written comments regarding the proposed Exchange from individuals, non-governmental entities and other public agencies following publication of the legal notices. (AR231-94, 809-1078.) C. Environmental Assessment

In connection with the Exchange, the Forest Service completed an Environmental Assessment (the "EA"). (AR202-209.) The EA's purpose was to describe the environmental consequences of implementing the proposed Exchange and alternatives to the Exchange and to determine whether an Environmental Impact Statement ("EIS") would be required. (AR23.) The EA identified and investigated many issues associated with the Exchange, including: (1) river access and access to public lands along the river; (2) impact on wildlife; (3) loss of other recreational opportunities in Mineral County; (4) impact on visual quality; and (5) potential loss of wetlands and floodplains. (AR45-86.) The EA considered six alternatives to the Exchange and analyzed four in detail. (AR38-44.) 9

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D.

Decision Notice and Finding of No Significant Impact

On January 20, 2004, the Responsible Official, Forest Supervisor Peter L. Clark, issued his Decision Notice and Finding of No Significant Impact ("FONSI") (collectively called the "Decision Notice"), disclosing his decision to implement the Exchange as outlined in the EA under "Alternative 1 - Proposed Action," with certain modifications described in the Decision Notice. (AR3.) The Decision Notice reflects that the "EA and planning record were reviewed in light of the modifications and none of the conclusions are affected." (AR3.) The Decision Notice found that the Exchange would result in the following benefits: (1) elimination of approximately eleven miles of boundary lines with a one-time cost saving of $55,000.00; (2) elimination of right-of-way issues by acquiring properties traversed by the Continental Divide National Scenic Trail; (3) a net gain in public lands of 345.12 acres; (4) a net gain of 256.14 acres of elk winter range; and (5) a net gain of 25.99 acres of wetland. (AR7-8.) The Decision Notice also addressed certain impacts associated with the Exchange and how those impacts would be mitigated. First, although there would be a net loss of 34.01 acres of floodplain under federal ownership, no wildlife habitat would be lost because conservation easements would be placed on those portions of the Federal Parcels designated as floodplain. (AR9.) Second, 174 acres of lynx habitat would be acquired and 222 acres of lynx habitat conveyed, resulting in a net loss of 48 acres of lynx habitat. (AR9.) Deed restrictions would preserve the lynx habitat on the 222 acres conveyed, thus creating a net increase in the amount of lynx habitat protected. (AR9.) Third, to mitigate the loss of one potential river access point at Parcel L3, a river access point in another area will be improved. (AR9.) Fourth, to mitigate the 10

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loss of public access to a recreational trail in Parcel N2, the trail will be relocated. (AR10.) Finally, the Decision Notice concluded that the proposed Exchange was "not a major Federal action that would significantly affect the quality of the human environment. . . . [and] an environmental impact statement will not be prepared." (AR14.) E. Plaintiffs' Administrative Appeals

Each of the Plaintiffs appealed the January 20, 2004, Decision Notice on various grounds. (AR545-49, 589-90, 592-666, 686-693) Each timely-submitted appeal was carefully evaluated by the Forest Service, giving due consideration to: (1) the issues raised in the appeal; (2) the comments submitted by interested parties;4 (3) the challenged decision; and (4) the documentation supporting the decision.5 (AR754-771, 779-87, 797, 804-05, 808.) Several of the

The Forest Service received each appeal and also received extensive comments concerning the pending appeals, including Plaintiffs' appeals. (AR713-15, 717-721.) (Appeal 2004-02-09-0010, Guthals, Lewis, and Martin; Appeal 2004-02-09-0018, Antlers Rio Grande Lodge, Inc. and Powers; Appeal 2004-02-09-0019, Albright Appeal; 2004-02-09-0025, San Luis Valley Ecosystem Council). The comments elaborate on the factual and legal misstatements presented in the appeals. (AR713-15, 717-721.) By way of example, Plaintiffs Guthals, Lewis, and Martin portray parcel N6 as a recreational area with a reservoir and trail access. (AR545). The Western Land Group commented that the referenced reservoir is located predominantly on private land and while, when full, the reservoir can reach Forest Service land, the surface area of this portion of the reservoir does not support meaningful public recreation. (AR714.) Antlers and Powers attempted to supplement their appeal past the appeals deadline. (AR608-703.) Although the original appeal was given due consideration, the late-submitted supplemental materials were properly excluded (or the appeal on the additional grounds was effectively denied as untimely). (AR732); see also 36 C.F.R. § 215.15(a). As such, any specific challenges not raised to the administrative agency are not properly before this Court. Hormel v. Helvering, 312 U.S. 552, 556 (1941); Wilson v. Hodel, 758 F.2d 1369, 1372-73 (10th Cir. 1985). Even if the "supplement" had been timely, the supplement did not contain a qualifying counterappraisal, or evidence of deficiencies in the Forest Service's appraisal, to credibly challenge the appraisal the Forest Service used. 11
5

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Plaintiffs made conclusory allegations concerning Forest Service error, but they failed to include specific and relevant information to substantiate their claims. See 36 C.F.R. § 215.14(b) (requiring appealing party to state how "the decision specifically violates law, regulation, or policy"). For example, Plaintiffs Guthals, Lewis and Martin simply called the Exchange a "lopsided" trade, without offering concrete evidence to support their unsubstantiated allegation. (AR546.) They also offered no legal basis for any alleged violation of law. In any event, when it conducted its internal review of the Exchange, the Forest Service reasonably relied on the detailed and well-supported appraisals, the EA, and the other documentation that formed the basis for the FONSI and the Decision Notice.6 After evaluating the available information, including Plaintiffs' largely deficient submissions, the Forest Service denied the Guthals, Lewis, Martin, Powers, Albright, Antlers, and San Luis Valley Ecosystem Council's administrative appeals of the Decision Notice on May 13, 2004. (AR797, 804-05,-808; see also AR754-771, 779-87).7

Plaintiffs complain that the Forest Service acted to quickly in signing the Exchange, thereby allegedly impairing their appeal rights. However, Plaintiffs did not request a stay of the Decision Notice approving the Exchange pending their appeals. Even without the request for a stay, the Exchange remained subject to all appeal rights. 36 C.F.R. § 254.14(a)(6). Had Plaintiffs prevailed in their appeals, the Exchange would not have proceeded. Signing the Exchange had no impact on the appeals - they were given the same consideration they would have had even if the Exchange Agreement substantially post-dated the appeal responses. The final decision to deny the appeals was preceded by a thorough recommendation by Randal Karstaedt, the appeal reviewing officer for the Forest Service. (AR545-9, 589-91, 592666, 686-93.) 12
7

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F.

Exchange Agreement

Based on the Decision Notice that approved the proposed Exchange, on January 21, 2004, the Forest Service and the private property owners (the "Non-Federal Parties") entered into an Exchange Agreement (the "Agreement"). (AR2184-2205.) Under the Agreement, the NonFederal Parties agreed to convey 814.91 acres of non-federal land, referred to as parcels LR1LR5, B3, and B4, located in Mineral, Rio Grande, and Hinsdale counties valued at $1,598,000.00 to the United States (the "Private Parcels").8 (AR6-7, 2184.) In return, the United States ­ through the Forest Service ­ agreed to convey 469.79 acres of Forest Service land, referred to as parcels N1, N2, N4-N6, L1-L5, and the Hays Placer and Continental Divide claims valued at $1,493,500.00 (the "Federal Parcels"), to the Non-Federal Parties and to pay the Non-Federal Parties $104,500.00 to equalize the values. (AR5, 2184.) The Non-Federal Parties also agreed to other terms and conditions, including but not limited to the following: · First, they agreed to deed restrictions on wetlands and flood plains associated with the Federal Parcels that they would receive (AR2196-97); · Second, they agreed to deed restrictions prohibiting development or commercial timber harvest on Parcels N4, N5, and N6 within areas identified as Boreal toad or Canada lynx habitat (AR2197);

8

Infra § II.A.1-6, pp. 3-9 (describing the parcels that are part of the Exchange). 13

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·

Third, they agreed to a deed restriction on Parcel L5 limiting future development to no more than five residential dwellings, subject to compliance with Mineral County, Colorado, zoning and land use ordinances. (AR2197);

·

Fourth, they agreed to pay for the relocation of the trail on Parcel N2 to a location suitable to the Forest Service (AR2197);

·

Fifth, they agreed to pay for certain access improvements to the Rio Grande in the location generally referred to as the "Park Corrals" and/or Rio Grande Campground. (AR2197); and

·

Sixth, they agreed to allow access for scientific research purposes to Parcel N2 under certain conditions. (AR2197.) G. Plaintiffs' Opposition to the Exchange and Procedural Background

Charles C. Powers, the lead Plaintiff, is an attorney and is the President of Antlers Rio Grande Lodge ("Antlers") in Mineral County, Colorado. (AR609; see also Pl's Br. at 3, ¶2.) Antlers is adjacent to one of the federal parcels included in the Exchange ­ parcel N2 ­ and is a competitor to Broadacres Ranch, whose owners will acquire N2 in the Exchange.9 (AR599.) Plaintiffs claim to be "ready and able to purchase N-2," although they never submitted a competing land exchange proposal during the relevant time-frame.10 (AR594, 718.) Antlers admits to the use of part of parcel N2 as part of its commercial operations: "Loss of access of

9

Nearburg owns Broadacres Ranch. (AR718, 2252-53; see also Pl's Br. at 3-4.)

Powers admits that he has been aware of the Exchange since 2001. See Powers Affidavit (dated June 1, 2005 and included at Doc. #3). 14

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[Antlers] patrons to the National Forest Property N-2 represents a severe adverse economic impact on the local economy and a very important local business[.]" (AR600, 719.) Plaintiffs assert that their economic interests must be considered when the Court assesses the merits of the claims presented. See, e.g., Pl's Br. at 5, ¶2 (sent. 5). Indeed, Plaintiffs ask this Court to place their individual interests above the interests of the public at large. However, it is axiomatic that a federal agency must consider the interests of the public at large, rather than focus solely on the alleged impacts to certain individuals or entities, when they make decisions. Plaintiffs filed their complaint on May 27, 2004, and a few days later, on June 1, 2004, Plaintiffs filed a Motion for Temporary Restraining Order and Preliminary Injunction ("TRO/PI Motion") to enjoin the Exchange. See Complaint and TRO/PI Motion, Doc. #1, #4. The Complaint alleges five FLPMA claims and one NEPA Claim. The FLPMA claims assert that: (1) the Forest Service has not received equivalent value from the private property owners (Complaint at ¶¶ 34-36); (2) Plaintiffs' supplemental appeals were not properly considered (Id. at ¶¶37-43); (3) Plaintiffs were denied effective appeal rights (Id. at ¶¶44-45); (4) the land acquisition standards were violated (Id. at ¶¶46-48); and (5) the forest plan objectives and standards were violated (Id. at ¶¶49-55). The NEPA claim challenges the Forest Service's failure to prepare an environmental impact statement ("EIS").11 (Id. at ¶¶56-65). Defendant later notified Plaintiffs that the proposed Exchange would not be consummated until August 15, 2004, for reasons unrelated to this lawsuit. See Stipulation, Doc.

While they do not articulate their claims as such, Plaintiffs' claims regarding the alleged inconsistencies with the Forest Plan are NFMA claims. Infra pp. 48-60. 15

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#8. As such, the parties agreed that there was no need for immediate relief and agreed upon a schedule for the Preliminary Injunction Motion to be heard. Id. The Preliminary Injunction Motion was scheduled to be heard on August 5, 2004. See Hearing Transcript ("Tr."), Doc. #46. Defendants agreed not to move forward on the land exchange until a decision on the merits issued. Tr. at 6:3-8 and 12:13-18. The Court made that agreement an Order of the Court, rendering moot the need to rule on the Preliminary Injunction Motion. Id. at 12:13-18; 13:21-14; and 16:11-15. At that hearing, the Court heard the Intervenors' request to intervene, id., and approved intervention. Id. at 42:8-19. Following the parties' agreement concerning supplementation of the record, the stipulated briefing schedule was triggered. Defendant now responds to Plaintiffs' substantive brief.12 See Doc. #. 5, #62, and #80. III. STATUTORY AND REGULATORY FRAMEWORK A. STANDARD AND SCOPE OF REVIEW UNDER THE ADMINISTRATIVE PROCEDURE ACT

The Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701-06, imposes a narrow and highly deferential standard of review limited to a determination of whether the agency acted in a manner that was "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99 (1977). Significantly,

In addition, the parties have agreed that the five declarations submitted by Plaintiffs may be considered for standing purposes only, but not to attack the agency's action. See Stipulation, Doc. #92 and Notice with Affidavits, Doc. #85. 16

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the APA's arbitrary and capricious standard is a deferential one; administrative determinations may be set aside only for substantial procedural or substantive reasons, and the court cannot substitute its own judgment for that of the agency. Utahns for Better Transp., Inc. v. United States Dep't of Transp., 305 F.3d 1152, 1164 (10th Cir. 2002). Judicial review under the APA is limited to the administrative record that was before the agency decision maker. Florida Power & Light Co. v. Lorion, 470 U.S. 729, 743 (1985); Camp v. Pitts, 411 U.S. 138, 143 (1973). "[T]he focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court." Bar MK Ranches v. Yuetter, 994 F.2d 735, 739 (10th Cir. 1993) (quoting Camp v. Pitts, 411 U.S. 138, 142 (1973)).13 To ensure fair review of an agency action, therefore, the court "should have before it neither more nor less information than did the agency when it made its decision." The Fund for Animals, et al. v. Williams, 245 F. Supp. 2d 49, 55 (D.D.C. 2003) (citing IMS, P.C. v. Alvarez, 129 F.3d 618, 623 (D.C. Cir. 1997) (further citations omitted)). B. FOREST SERVICE MANAGEMENT OF LANDS IN THE NATIONAL FORESTS

The National Forest Management Act ("NFMA") was enacted in 1976 as an amendment to the Forest and Range Land Renewable Resources Planning Act of 1974. 16 U.S.C. §§ 160087. These statutes, along with the Multiple-Use Sustained-Yield Act of 1960 ("MUSY"), 16 U.S.C. §§ 528-31, provide Congressional direction to the Forest Service for management of the

The Forest Service certified the AR for this litigation on June 21, 2004. See Doc. #5. At Plaintiffs' request, the Forest Service supplemented the Administrative Record by filing a Supplemental Record on December 16, 2004, and on November 11, 2005. See Doc. #62, #80. 17

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approximately 191 million acres of National Forest System lands. See Forest Guardians v. United States Forest Serv., 329 F.3d 1089, 1092 (9th Cir. 2003). The Forest Service manages each unit of the National Forest System by preparing a Land and Resource Management Plan ("Forest Plan" or "Plan") for that unit. 16 U.S.C. § 1604(a). The Forest Service implements a Plan by approving or disapproving site-specific actions consistent with the Plan. 16 U.S.C. § 1604(I). 1. The Forest Service's Discretion Vis-a-Vis Land Exchanges

The Forest Service participates in land exchanges on National Forest System lands consistent with the Federal Land Policy and Management Act and its implementing regulations. 43 U.S.C. § 1701(a)(10); see also 36 C.F.R. part 254. FLPMA requires an exchange to be in the public interest. 43 U.S.C. § 1716(a). The General Exchange Act also allows an exchange of land when that exchange is in the public interest. See 16 U.S.C. § 485. In considering the public interest, the Forest Service is directed to give full consideration to "better Federal land management and the needs of State and local people, including needs for lands for the economy, community expansion, recreation areas, food, fiber, minerals, and fish and wildlife . . ." 43 U.S.C. § 1716(a); see also 43 U.S.C. § 1716(b) (allowing exchange if federal land "is proper for transfer out of Federal ownership . . . "); 36 C.F.R. § 254.3(a)(1)(iv) (the parcel must be "suitable for elimination from the NFS"). Because a substantial component of Plaintiffs' challenge to the land Exchange is the allegation that the Forest Service violated appraisal principals, a brief description of the governing law is appropriate. The Federal Land Exchange Facilitation Act ("FLEFA") was 18

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enacted in 1988 because Congress determined that existing laws providing authority for land exchanges involving lands under the jurisdiction of the Secretary of Agriculture and the Secretary of the Interior needed "certain revisions to streamline and facilitate land exchange procedures and expedite exchanges." P.L 100-409 § 2(a), 102 Stat. 1086, codified as 43 U.S.C. § 1716. Congress thus empowered the Secretaries of Agriculture and Interior to promulgate new and comprehensive rules governing exchanges, and expressly required that those rules ". . . include provisions pertaining to appraisals of lands and interests therein involved in such exchanges." 43 U.S.C. § 1716(f)(1). Accordingly, the Secretaries of Agriculture and the Interior jointly promulgated rules in 1994 to implement FLEFA, 59 FR 10854 (March 8, 1994), now codified at 36 CFR §§ 254.1254.17. A key provision of these rules states that an Exchange Agreement shall contain agreed upon values of the involved lands, 36 CFR § 254.14(a)(3), and that an Exchange Agreement is legally binding on all parties, subject only to specified exigencies that would prevent performance of the exchange. 36 CFR § 254.14(b). For example, if acceptable title could not be conveyed, loss or damage occurs to either property, undisclosed hazardous substances are found, or the exchange proposal is not upheld in an administrative appeal, the regulations release the parties from performance. Id. All land exchanges are discretionary and must be in the public interest. 36 C.F.R. § 254.3. The regulations further require that the value of the land considered in an exchange be fixed in an appraisal that complies with the Uniform Appraisal Standards for Federal Land Acquisitions ("UASFLA"). 36 C.F.R. § 254.9. 19

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Additional direction regarding land exchanges and appraisals is contained in the Forest Service Handbook ("FSH") and the Forest Service Manual ("FSM").14 The FSM states that "[t]he objective of the land exchange program is to utilize land exchanges as a tool, in concert with the purchase program, to implement Forest land and resource management planning and direction; to optimize National Forest System landownership patterns; to further resource protection and use; and to meet the present and future needs of the American people." FSM 5430.2. 2. The Land Exchange Process

Because Plaintiffs challenge not just the Forest Service's determination that the Exchange was in the public interest, but also the timing of the documents associated with the Exchange, a brief explanation of the mechanics of a land exchange is included. The parties to an exchange enter into a "non binding agreement to initiate an exchange," which does not require any party to consummate the exchange. 36 C.F.R. § 254.4(c) and (f); see also 36 C.F.R. § 254.3. The agreement sets forth a timetable and the parties' responsibilities in the land exchange process. Id. Land exchanges may be "assembled" by consolidating multiple parcels into a package to complete one or more exchange transactions over a period of time. 36 C.F.R. § 254.5. The properties to be exchanged need not be of equal value, so long as the difference in value between

See FSM 540 (Appraisal Policy), FSH 5409.12 (Appraisal Handbook), FSM 5430 (Land Exchange Policy and Guidance), FSH 5409.13 (Land Exchange Policy and Guidance). AR3816 -3910; see also www.fs.fed.us/im/directives. 20

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the public and private lands does not exceed 25% of the total value of the lands transferred out of Federal ownership. 43 U.S.C. § 1716(b).15 The regulations set forth the procedures and standards that must be satisfied in order to proceed beyond the non-binding preliminary agreement. See 36 C.F.R. § 254.3, and 254.6 to 254.16. An environmental analysis consistent with NEPA, 42 U.S.C. §§ 4321-4334, is a prerequisite to the land exchange process. 36 C.F.R. § 254.3(g); see supra p. 9 and infra pp. 2237. The regulations also require valuation of the parcels at issue, with the ultimate determination of value vested in the Forest Service. The appraisal that determines the value must satisfy specific appraisal requirements. 36 C.F.R. § 254.9. Once the necessary environmental16 and valuation analyses are complete, a Forest Service official decides whether to approve or disapprove a proposed exchange. 36 C.F.R. § 254.13(a)(1). Pursuant to the Forest Service land exchange regulations, public notice of the decision is required only after that decision is made. 36 C.F.R. § 254.13(2). Any suggestion that the failure to publicize every draft appraisal (even before the Forest Service accepted the appraisal), is somehow deficient is not legally supportable.

As indicated in the AR, the total value of the private lands is $1,598,000.00 (AR6-7, 2184.) The total value of the Federal lands is $1,493,500.00. (AR5, 2184.) The Forest Service paid $104,500.00 to equalize the value. (AR5, 2184.) The amount paid is less than 25% of either value. (6.54% of the private lands and 7.00% of the Federal lands). The notice provisions under NEPA are separate from the notice provisions for land exchanges. Notice of the EA was provided separately. Plaintiffs do not claim that they did not have notices of the EA. Rather Plaintiffs allege that they had inadequate participation in the valuation process. 21
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Once the Forest Service approves a land exchange, members of the public who commented on the exchange have 45 days to appeal the exchange decision. 36 C.F.R. § 254.13(b); see also 36 C.F.R. part 215. Exchange agreements are specifically subject to the general Forest Service administrative appeal provisions. 36 C.F.R. § 254.14(a)(6). If an appeal results in a Notice of Decision being reversed, the exchange agreement would be nullified. Likewise, if any appeal does not succeed, the parties to the exchange can move forward with the exchange agreement. Regardless of when an exchange agreement is executed, it remains legally subordinated to the appeal provisions of the regulations. Id. In any event, to show prejudice, Plaintiffs would have the burden of showing that the outcome of the decision would have been different had the Forest Service not signed the Exchange Agreement until the appeals time-frame expired. See Lewis v. Glickman, 104 F. Supp. 2d 1311, 1324 (D. Kan. 2000).17 C. OVERVIEW OF THE NATIONAL ENVIRONMENTAL POLICY ACT

The National Environmental Policy Act, 42 U.S.C. §§ 4321-4334, is a procedural statute that does not control an agency's ultimate decision about proceeding with a proposal. Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350 (1989). NEPA requires an agency to prepare an EIS only when it proposes a "major Federal action[] significantly affecting the quality of the human environment." 42 U.S.C. § 4332(2)(c) (emphasis added). Regulations issued by the Council on Environmental Quality ("CEQ") guide agency decisions regarding when an EIS is

Plaintiffs' grievances were considered and addressed, and ultimately rejected. (AR54549, 589-90, 592-666, 686-693, 797, 804-05,-808; see also AR754-771, 779-87.) There is no error just because the agency reaches a conclusion different than the conclusion Plaintiffs advocate. 22

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required. 40 C.F.R. § 1501.4. The agency may undertake an EA to determine whether a proposed action requires an EIS. 40 C.F.R. §§1501.4(b), 1508.9(a)(1), and 1508.13. If the analysis shows that the agency's proposed action will not have a significant effect on the quality of the human environment, then it completes its NEPA analysis by preparing a FONSI. The Silverton Snowmobile Club v. United States Forest Serv., 433 F.3d 772, 780 (10th Cir. 2006) (recognizing that the decision to issue a FONSI, rather than prepare an EIS, is a "factual determination which implicates agency expertise"); see also 40 C.F.R. §§ 1501.4, 1508.13. ARGUMENT Plaintiffs seek to enjoin the Forest Service from "exchanging property pursuant to the Decision Notice Approving the Rio Oxbow Land Exchange." See Pl. Mot. at 1. Plaintiffs argue that the Forest Service's decision to approve the Exchange is arbitrary and capricious because it violates FLPMA and NEPA. See Pl. Br. at 5-6; see also Second Amended Complaint at Count III, Doc. #42. Plaintiffs have a heavy burden, given that the APA imposes a narrow and highly deferential standard of review limited to a determination of whether the agency acted in a manner that was "arbitrary, capricious, an abuse of discretion or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(A); Citizens to Preserve Overtone Park v. Vole, 401 U.S. 402, 416 (1971). The Forest Service joins in the Intervenors' argument regarding Plaintiffs' lack of standing. See Intervenor's Br. Because the Intervenors extensively briefed the standing issue, the Forest Service addresses that issue only briefly in Section II.A. (infra pp. 38-42). The Forest

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Service's substantive briefing assumes, arguendo ­ but does not concede ­ that the Court finds there is jurisdiction. I. PLAINTIFFS' NATIONAL ENVIRONMENTAL POLICY ACT CLAIM MUST FAIL BECAUSE THE FOREST SERVICE ACTED REASONABLY AND CONSISTENT WITH APPLICABLE LAW . Plaintiffs assert that the EA did not adequately analyze the Exchange, as modified in the Decision Notice, and that a full EIS should have been done. Pl. Br. at 21, ¶ 4. Without providing any citation to the AR, Plaintiffs make a belated and unavailing attempt to challenge the Forest Service's NEPA analysis.18 Id. A. The Forest Service's Conclusion that an EIS was Not Required was Neither Arbitrary Nor Capricious.

Because the Exchange did not fall in a category automatically requiring an EIS, the Forest Service prepared an EA, which was available for public comment in draft form (AR202-209, 365-544) and later finalized in January 2004. (AR20-87; 98-102; see also 40 C.F.R. § 1501.4(b),(c) (2004)). Then, guided by the CEQ Regulations, the Forest Service used the EA to evaluate whether the Exchange was a major federal action that would have a significant impact

With very few exceptions, Plaintiffs provide no record citation for their factual assertions. It is not the Forest Service's or the Court's job to dig through the AR to find support for Plaintiff's allegations. See Phillips v. Calhoun, 956 F.2d 949, 953-54 (10th Cir. 1992) (observing that a "litigant who fails to press a point by supporting it with pertinent authority" forfeits the point); Entertainment Research Group, Inc. v. Genesis Creative Group, Inc., 122 F.3d 1211, 1217 (9th Cir. 1997) (court reviews only issues that are argued "specifically and distinctly in a party's opening brief" and noting that the Court will not "manufacture argument[s]" for a party and that "a bare assertion does not preserve a claim . . . `Judges are not like pigs, hunting for truffles buried in briefs'") (citations omitted); see also Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1161 (10th Cir. 2000) (failure to address an issue constitutes a waiver). 24

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on the quality of the human environment, requiring an EIS. 40 C.F.R. § 1501.4(c). The Forest Service determined that the proposed exchange did not constitute a major Federal action significantly affecting the quality of the human environment. Supra p. 10-11; 42 U.S.C. § 4332(c) (2003). (see also AR1-14 and 199-200.) To determine significance, an agency must consider two elements: (1) context; and (2) intensity. 40 C.F.R. § 1508.27(a)-(b). As to context, "in the case of a site-specific action, significance would usually depend upon the effects in the locale rather than in the world as a whole." 40 C.F.R. § 1508.27(a). For the Exchange, which is a site-specific action, the Forest Service determined that the relevant context was "Mineral, Hinsdale and Rio Grande Counties with implications for the immediate area only." (AR14.) The second element in determining whether an action is significant is intensity, which "refers to the severity of impact." 40 C.F.R. § 1508.27(b). The regulations outline ten factors to consider when determining the intensity of an action as it relates to significance. Id. Each of the ten factors was discussed in the EA and other documents that the Forest Service evaluated when it approved the Exchange in the Decision Notice. (AR14-16.) The first factor in determining intensity is whether there are significant effects from a proposed action even if on balance the effects of an action are beneficial. 40 C.F.R. § 1508.27(b)(1). Plaintiffs claim that the impact on each local environment should have been separately analyzed. Analyzing the relevant areas, the Forest Service concluded in the Decision Notice that "the benefits of the selected action are not significant in context of the direct, indirect, and cumulative effects." (AR14.) 25

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The second factor analyzes the degree to which a proposed action affects public health or safety. 40 C.F.R. § 1508.27(b)(2). The Forest Service, in considering this factor, removed several proposed properties that were part of the Carson townsite from the Exchange because of a concern about hazardous waste on those parcels. (AR14 and 1778-2023.) The third factor requires review of "unique characteristics of the geographic area such as proximity to historic or cultural resources, park lands, prime farmlands, wetlands, wild and scenic rivers, or ecologically critical areas." 40 C.F.R. § 1508.27(b)(3). Plaintiffs accuse the Forest Service of failing to consider: (1) the Antlers cliffs, and (2) critical winter rang