Custer Gallatin National Forest Lawsuit: South Plateau Project Vacated

A federal judge threw out the Forest Service’s largest logging project on the Custer Gallatin National Forest in December 2025, ending a two-year lawsuit over timber cutting and road building on the doorstep of Yellowstone National Park. In the Custer Gallatin National Forest logging lawsuit, U.S. District Judge Donald W. Molloy ruled that the Forest Service violated the National Environmental Policy Act, the National Forest Management Act, and the Endangered Species Act when it approved the South Plateau Landscape Area Treatment Project without deciding where the roads would go or where the trees would be cut.¹ His 46-page order vacated the project’s environmental assessment and decision notice, sending the agency back to the beginning if it wants to move forward.²

What the South Plateau Project Would Have Done

The South Plateau project covered 39,909 acres on the Hebgen Lake Ranger District, hugging the western border of Yellowstone from U.S. Highway 20 south to the Montana-Idaho line. Within that area, the Forest Service authorized treatments on 16,462 acres: 5,551 acres of clearcutting, 6,593 acres of commercial thinning, 2,514 acres of non-commercial thinning, and 1,804 acres of fuels treatment. The plan called for 56.8 miles of temporary roads and was expected to produce about 83 million board feet of timber over 15 years.³

In August 2023, the Forest Service issued a Decision Notice and Finding of No Significant Impact, concluding no full Environmental Impact Statement was needed.⁴ It used “condition-based management,” approving the total scope of activity up front while leaving the specific locations of roads and cuts to be worked out later by field crews.

Who Sued and What They Argued

Two lawsuits landed in the U.S. District Court for the District of Montana and were consolidated. The first, filed in September 2023, came from the Center for Biological Diversity, the Alliance for the Wild Rockies, and the Council on Wildlife and Fish.⁵ The second, filed that December, was brought by the Gallatin Wildlife Association, Native Ecosystems Council, and WildEarth Guardians, represented by the Western Environmental Law Center.⁶ Sun Mountain Lumber Company, which had bid on one of the timber sales, intervened as a defendant.⁷

The plaintiffs pressed three overlapping theories. Under NEPA, they argued the agency could not have taken the required “hard look” at environmental effects because the public had no way to know where the cutting and roading would actually occur. Under the National Forest Management Act, they argued the project blew through the clearcutting and road-building limits set in the 2022 Custer Gallatin Forest Plan to protect grizzly bears and Canada lynx. Under the Endangered Species Act, they argued the agencies leaned on outdated and unsupported metrics when analyzing harm to listed species.⁸ The Forest Service agreed to hold off on work while the case moved.⁶

Why Judge Molloy Vacated the Project

Approving Roads Without Locations Failed NEPA

The heart of the ruling is Judge Molloy’s rejection of how condition-based management was used here. The Ninth Circuit has said the approach is not inherently unlawful, but its recent decisions have relied on projects that came with unit-by-unit maps showing the maximum effect at a smaller scale.⁹ South Plateau had no such maps. The Forest Service authorized 56.8 miles of temporary roads without identifying where they would run, and because the impact on grizzly secure habitat depends on precisely where a road sits rather than how many miles are built in total, the court held the agency had not taken a hard look at anything.² The approach, Molloy wrote, “conflates a promise of future statutory compliance with actual compliance.”¹

Three Forest Plan Standards the Agency Could Not Show It Would Meet

The same locational vagueness sank the agency’s compliance with three specific wildlife standards in the 2022 Forest Plan:

The lynx regeneration standard, VEG-S2, prohibits regenerating more than 15 percent of lynx habitat within a Lynx Analysis Unit in any ten-year period. With 5,551 acres of clearcutting authorized and no specification of where the cuts would fall relative to lynx habitat, the court found the record insufficient to show the limit would hold.²
The grizzly bear 1% standard caps temporary reductions of secure habitat below baseline at one percent of the acreage in the largest subunit of a Bear Management Unit. The math on paper worked, but the court found that without confirmed road locations, compliance could not be verified, noting that “even a ten-foot shift in a single road could affect compliance.”²
The grizzly bear four-year standard bars project activities from reducing secure habitat below baseline for more than four consecutive years. The Forest Service argued each timber sale contract could be counted as its own “project activity,” resetting the clock. Judge Molloy rejected that reading, holding the term refers to the NEPA-approved project as a whole.²

Across all three, the court held that the Forest Service’s “Design Features,” essentially promises to check compliance later, do not substitute for demonstrating compliance at the time of the decision.²

The 10-Acre Definition of Secure Habitat Was Not Best Available Science

The most far-reaching finding involved how the Custer Gallatin defines “secure habitat” for grizzly bears. The forest treats a patch as small as 10 acres as protected bear habitat, even when surrounded by roads and cutting. Judge Molloy found no scientific basis for that number and contrasted it with the Northern Continental Divide Ecosystem, which requires secure-habitat patches of at least 2,500 acres, sitting at least 500 meters from any road.¹ Relying on the 10-acre threshold, the court held, meant the Fish and Wildlife Service failed to use the best available science required under the Endangered Species Act.¹⁰

Chris Servheen, the retired FWS Grizzly Bear Recovery Coordinator, said the ruling “really unravels the whole habitat standard for the Greater Yellowstone Grizzly Bear Conservation Strategy.” He described the 10-acre patch size as a policy compromise, not a biological finding, meant to give some recognition to habitat scraps in heavily roaded country. “Nobody ever thought you could have a grizzly living on 10 acres for a month and a half,” Servheen said. “That’s not what was intended.”¹

What the Court Did Not Overturn

The plaintiffs did not win on every claim. Judge Molloy upheld the Forest Service’s climate change analysis, accepting that the agency adequately handled cumulative carbon effects by tiering its project-level analysis to the 2022 Land Management Plan EIS, and accepting the conclusion that long-term carbon storage would outweigh a short-term release.¹¹ The court also declined to disturb the agency’s cumulative-effects boundary for the nearby Yale Creek Project.²

What Happens Next, and What It Has Already Changed

The ruling stopped all planned logging, road construction, and prescribed burning tied to South Plateau. Sun Mountain Lumber’s outreach forester Sean Steinebach said the decision “really hurts” and that the company hoped the Forest Service would appeal to the Ninth Circuit. As of late December 2025, the Forest Service had not said publicly whether it would.⁷

The 10-acre finding has already reshaped the litigation landscape on the same forest. In early 2026, conservation groups told the Forest Service and Fish and Wildlife Service they would pursue an ESA claim on the same secure-habitat issue against the Cooke City Fuels Project, a separate 19,921-acre initiative. Rather than defend it, the Forest Service withdrew the project in May 2026, with the notice signed by Gardiner District Ranger Clint Kolarich.¹² That project had been estimated to cost taxpayers $2.8 million on a net basis.¹³

More suits followed. In late April 2026, the Gallatin Wildlife Association and others challenged a 5,600-acre logging and prescribed burn project between Hyalite and South Cottonwood canyons, echoing the South Plateau claims on lynx habitat, grizzly bears, and inadequate review.¹⁴ In May 2026, the Alliance for the Wild Rockies and others sued over the Burnt Mountain and Red Lodge Mountain projects, arguing the two should be analyzed as one project that would exceed the acreage limit for categorical exclusions.¹⁵

1
Mountain Journal. Forest Service Rush To Avoid Red Tape Derails Logging Project Near Yellowstone National Park
2
Western Law. Order, Center for Biological Diversity v. U.S. Forest Service
3
Center for Biological Diversity. Complaint, Center for Biological Diversity v. U.S. Forest Service
4
Hi-Line Today. Custer Gallatin Forest Releases Final Decision for South Plateau Landscape Area Treatment Project
5
Montana Free Press. Environmental Groups Challenge Logging Project Bordering Yellowstone National Park
6
Daily Montanan. Second Lawsuit Challenges USFS Fuels and Logging Project Near Yellowstone National Park
7
Montana Free Press. Judge Halts Forest Service Logging Project North of Yellowstone
8
Idaho Capital Sun. Conservation Groups Sue Federal Government for Logging Proposal Near Yellowstone National Park
9
Ninth Circuit Court of Appeals. NCCC v. USFS
10
National Parks Traveler. Federal Court Blocks Logging Project Near Yellowstone National Park
11
Sabin Center Climate Case Chart. Center for Biological Diversity v. U.S. Forest Service, Order
12
CounterPunch. Forest Service Withdraws Cooke City Deforestation Project on the Border of Yellowstone National Park
13
Daily Montanan. U.S. Forest Service Drops Large Logging Thinning Project Near Yellowstone National Park
14
Daily Montanan. Conservation Groups File Lawsuit To Stop Logging Burning in Montana’s Most Popular National Forest
15
Forest Policy Pub. Federal Lands Litigation Update Through June 2026