An oyster company hoping to retain its lease at Point Reyes National Seashore was dealt another setback Tuesday when an appellate court refused to issue a preliminary injunction against the National Park Service.

After a lower court in February refused to issue the injunction, Drakes Bay Oyster Co. owner Kevin Lunny asked the 9th U.S. Circuit Court of Appeals to grant the injunction so he could continue operating his oyster farm in the seashore's waters while his lawsuit against the Park Service proceeds.

Last November, then-Interior Secretary Ken Salazar declined to exercise a renewal option contained within the company's lease agreement. In opting to let the lease expire on its own, the Interior secretary said Congress long had intended that the waters of Drakes Estero would become official wilderness.

In short, the court's majority on Tuesday agreed with that position, and noted that Drakes Bay knew that the lease it acquired in 2005 would expire in November 2012.

"In letting the permit lapse, the Secretary emphasized the importance of the long-term environmental impact of the decision on Drakes Estero, which is located in an area designated as potential wilderness," wrote Judge M. Margaret McKeown. "He also underscored that, when Drakes Bay purchased the property in 2005, it did so with eyes wide open to the fact that the permit acquired from its predecessor owner was set to expire just seven years later, in 2012.

"Drakes Bay’s disagreement with the value judgments made by the Secretary is not a legitimate basis on which to set aside the decision. Once we determine, as we have, that the Secretary did not violate any statutory mandate, it is not our province to intercede in his discretionary decision. We, therefore, affirm the district court’s order denying a preliminary injunction."

In challenging Secretary Salazar's decision not to renew the oyster company's lease, Drakes Bay's lawyers argued that the secretary broke the Administrative Procedures Act and violated the National Environmental Policy Act when he decided not to extend the lease for 10 years.

But in the 50-page ruling, the 2-1 decision held that the court "lacked jurisdiction to review the Secretary’s ultimate discretionary decision whether to issue a new permit." Furthermore, the judges didn't think the oyster company could prove that Secretary Salazar had "violated constitutional, statutory, regulatory, or other legal mandates or restrictions."

In dissenting, Judge Paul J. Watford said he would have granted the injunction because "Drakes Bay was likely to prevail on its claim that the Secretary’s decision was arbitrary, capricious, or otherwise not in accordance with law."

Amy Trainer, executive director of the Environmental Action Committee of West Marin, praised the majority ruling, saying "(T)he court rightly decided that former Interior Secretary Ken Salazar had full discretion to let the oyster operation permit expire and to honor the 1976 wilderness designation for Drakes Estero. We are very grateful for this decision, which supports the Estero’s full wilderness protection.”

Added Neal Desai, associate director of the Pacific Region for the National Parks Conservation Association, “(T)he court ruling affirms that our national parks will be preserved and are another step closer to being protected as wilderness for the American people. Incredibly beautiful places like Drakes Estero need to be returned to their full splendor as Congress determined decades ago when the land was purchased by and for the American public. We have been waiting for this moment for 40 years.”

The majority ruling pilloried the contention of Drakes Bay's lawyers that when Congress adopted legislation in 2009 giving Secretary Salazar authority to control the fate of the oyster company that it specifically intended for him to extend the company's lease. To make that point, they noted that the legislation in question, known as Section 124, stated 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, except as provided herein, for a period of 10 years from November 30, 2012..."

Nowhere in that legislative construction, the attorneys note, did Congress insert the words "or deny" a permit for the oyster company.

"Congress intended to put a thumb on the scale in favor of DBOC. It did not intend to confer unreviewable authority on Defendants to deny DBOC a permit," the attorneys wrote in their appeal.

But in the majority opinion, Judge McKeown said the Section 124 language "does not dictate such a oneway ratchet. Indeed, if Congress had so wanted to make it easy or automatic for Drakes Bay, one wonders why it rejected the proposal that would have simply required the Secretary to issue a new permit. The ultimate legislation was a move away from, not toward, Drakes Bay’s favored result."

"A natural reading of the authorization to issue a permit implies authorization not to issue one, and we see no reason to interpret the 'notwithstanding' clause as applying to one outcome but not the other," the judge added.

As to the broader question of whether Secretary Salazar abused his discretion, Judge McKeown wrote that the only issue before the court was whether the Interior secretary had "misinterpreted his authority under Section 124. The record leaves no doubt that the answer is no."

While proponents of the oyster operation have said the estero could not be designated wilderness because the state of California retained the mineral and fishing rights to the area, the majority opinion pointed out that "(T)he Wilderness Act itself nowhere provides that retained mineral or fishing rights preclude wilderness designation. Drakes Bay is not likely to succeed on its theory that the Secretary’s current position—that the permit’s expiration enables wilderness designation despite retained mineral and fishing rights—amounted to 'legal error.'"

The majority opinion also reiterated a point that has been stressed many times previously, that "Drakes Bay purchased the oyster farm with full disclosure, knowing that the reservation of use and occupancy was set to expire in 2012."

"The Department repeatedly warned the company that it did not plan to issue a new permit. Although the prospect of closing down a business is a serious hardship, the only reasonable expectation Drakes Bay could have had at the outset was that such a closure was very likely, if not certain. Closure remained a distinct possibility even after the passage of Section 124. Drakes Bay argued to the district court that it had 'every reason to hope' for extension. But when parties ‘anticipate a pro forma result’ in permitting applications, they become ‘largely responsible for their own harm.’”

"We see no reason to disturb the (lower) court’s finding that the company’s 'refusal to hear the message' was an equitable factor weighing against it."