In a case brought on behalf of the Association of California Water Agencies, the State Water Contractors and others, the Court held that BB&K had established a right to substantial attorneys fees on behalf of its clients since it had successfully "enforced" those provisions of the ESA that require the federal Government to consider the economic effect of its actions when it designates critical habitat for threatened or endangered species. Rejecting arguments brought by the United States Department of Justice, the Court determined that fees sought by BB&K for its clients were properly awarded under the "catalyst theory" of attorneys fees (involving a finding that BB&K's action served as the catalyst that caused the Government to modify its prior practice of non-compliance with the requirements of the ESA) and that the catalyst theory of attorneys fees remains good law within the Ninth Circuit.

The effect of the decision is to confirm that, when it designates critical habitat for species listed under the ESA, the Government must undertake a meaningful analysis of the economic impacts and can no longer simply assume that the bulk of the impacts occurred at the time of listing and, therefore, need not be considered. The ruling will be of assistance to property owners throughout the state dealing with critical habitat issues. Gregory Wilkinson of BB&K's Natural Resources Practice Group should be contacted if there are questions about the decision or its application.