Markle Interests, L.L.C. v. U.S. Fish and W

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
___________________ February 13, 2017
No. 14-31008 Lyle W. Cayce
Clerk
___________________
MARKLE INTERESTS, L.L.C.; P&F LUMBER COMPANY 2000, L.L.C.; PF
MONROE PROPERTIES, L.L.C.,
Plaintiffs - Appellants
v.
UNITED STATES FISH AND WILDLIFE SERVICE; DANIEL M. ASHE,
Director of United States Fish & Wildlife Service, in his official capacity;
UNITED STATES DEPARTMENT OF INTERIOR; SALLY JEWELL, in her
official capacity as Secretary of the Department of Interior,
Defendants - Appellees
CENTER FOR BIOLOGICAL DIVERSITY; GULF RESTORATION
NETWORK,
Intervenor Defendants - Appellees
_____________________________________________________________
Cons. w/ 14-31021
WEYERHAEUSER COMPANY,
Plaintiff - Appellant
v.
UNITED STATES FISH AND WILDLIFE SERVICE; DANIEL M. ASHE,
Director of United States Fish & Wildlife Service, in his official capacity;
SALLY JEWELL, in her official capacity as Secretary of the Department of
Interior,
Defendants - Appellees
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CENTER FOR BIOLOGICAL DIVERSITY; GULF RESTORATION
NETWORK,
Intervenor Defendants - Appellees
_______________________
Appeals from the United States District Court for the
Eastern District of Louisiana, New Orleans
_______________________
ON PETITION FOR REHEARING EN BANC
(Opinion June 30, 2016, 827 F.3d 452)
Before REAVLEY, OWEN, and HIGGINSON, Circuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
The court having been polled at the request of one of its members, and a
majority of the judges who are in regular active service and not disqualified
not having voted in favor (Fed. R. App. P. 35 and 5th Cir. R. 35), the Petition
for Rehearing En Banc is DENIED. In the en banc poll, six judges voted in
favor of rehearing (Judges Jolly, Jones, Smith, Clement, Owen, and Elrod) and
eight judges voted against rehearing (Chief Judge Stewart and Judges Dennis,
Prado, Southwick, Haynes, Graves, Higginson, and Costa). Judge Jones,
joined by Judges Jolly, Smith, Clement, Owen, and Elrod, dissents from the
court’s denial of rehearing en banc, and her dissent is attached.
ENTERED FOR THE COURT:
__________________________________
UNITED STATES CIRCUIT JUDGE
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JONES, Circuit Judge, joined by JOLLY, SMITH, CLEMENT, OWEN, and
ELROD, Circuit Judges, dissenting from Denial of Rehearing En Banc:
The protagonist in this Endangered Species Act (ESA) case—the dusky
gopher frog—is rumored to “play dead,” “cover its eyes,” “peak [sic] at you[,]
and then pretend to be dead again.” Markle Interests, L.L.C. v. U.S. Fish &
Wildlife Serv., 827 F.3d 452, 458 n.2 (5th Cir. 2016). The panel majority
regrettably followed the same strategy in judicial review—play dead, cover
their eyes, peek, and play dead again. Even more regrettably, the court refused
to rehear this decision en banc. I respectfully dissent.
The panel opinion, over Judge Owen’s cogent dissent, id. at 480–94,
approved an unauthorized extension of ESA restrictions to a 1,500 acre-plus
Louisiana land tract that is neither occupied by nor suitable for occupation by
nor connected in any way to the “shy frog.” The frogs currently live upon or
can inhabit eleven other uncontested critical habitat tracts in Mississippi. No
conservation benefits accrue to them, but this designation costs the Louisiana
landowners $34 million in future development opportunities. Properly
construed, the ESA does not authorize this wholly unprecedented regulatory
action.
The panel majority upheld the designation of the tract as “unoccupied
critical habitat.” See 16 U.S.C. § 1532(5)(A)(ii). Relying on administrative
deference, the majority reasoned that (1) the ESA and its implementing
regulations have no “habitability requirement”; (2) the (unoccupied) Louisiana
land is “essential for the conservation of” the frog even though it contains just
one of three features critical to dusky gopher frog habitat; and (3) the Fish and
Wildlife Service’s decision not to exclude this tract from critical-habitat
designation is discretionary and thus not judicially reviewable. I respectfully
submit that all of these conclusions are wrong.
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Each issue turns essentially on statutory construction, not on deference
to administrative discretion or scientific factfinding. The panel majority
opinion obscures the necessity for careful statutory exposition. More
troublingly, the majority opinion fails to distinguish relevant precedent that
recognized Congress’s prescribed limit to designations of unoccupied critical
habitat. Further, in declaring the decision not to exclude this tract as beyond
judicial review, the panel did not notice Bennett v. Spear, 520 U.S. 154,
117 S. Ct. 1154 (1997), which upholds judicial review for this exact statute,
and the panel majority ignored recent Supreme Court precedents that have
reined in attempts to prevent judicial review of agency action.
Despite the majority’s disclaimers and attempt to cabin their rationale,
the ramifications of this decision for national land use regulation and for
judicial review of agency action cannot be underestimated. Fifteen states
appear as amici urging rehearing en banc. For reasons explained herewith
and by Judge Owen’s dissent, I would have granted rehearing en banc.
I. Background
The U.S. Fish and Wildlife Service (the Service) is one of two agencies
tasked with implementing the ESA. The ESA requires the identification and
listing of endangered and threatened species. When a particular species is
listed, the Service must designate the species’ “critical habitat.” In particular,
the Service
to the maximum extent prudent and determinable . . . shall . . .
designate any habitat of such species which is then considered to
be critical habitat . . . and . . . may, from time-to-time thereafter as
appropriate, revise such designation.
16 U.S.C. § 1533(a)(3)(A)(i)–(ii).
“Critical habitat” is defined in an earlier provision as:
(i) the specific areas within the geographical area occupied by the
species, at the time it is listed in accordance with the
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provisions of section 1533 of this title, on which are found
those physical or biological features (I) essential to the
conservation of the species and (II) which may require special
management considerations or protection; [“occupied critical
habitat”] and
(ii) specific areas outside the geographical area occupied by the
species at the time it is listed in accordance with the
provisions of section 1533 of this title, upon a determination
by the Secretary that such areas are essential for the
conservation of the species. [“unoccupied critical habitat”]
Id. § 1532(5)(A)(i)–(ii).
Finally, the Service shall designate critical habitat “after taking into
consideration the economic impact, the impact on national security, and any
other relevant impact, of specifying any particular area as critical habitat,”
but it may exclude any area from such designation if “the benefits of such
exclusion outweigh the benefits of specifying such area” as critical habitat. Id.
§ 1533(b)(2).
Critical-habitat designation is consequential. “Designation of private
property as critical habitat can impose significant costs on landowners because
federal agencies may not authorize, fund, or carry out actions that are likely to
‘result in the destruction or adverse modification’ of critical habitat.” Otay
Mesa Prop., L.P. v. U.S. Dep’t of Interior, 646 F.3d 914, 915 (D.C. Cir. 2011)
(quoting 16 U.S.C. § 1536(a)(2)).
The Service listed the dusky gopher frog as endangered in 2001. Final
Rule to List the Mississippi Gopher Frog Distinct Population Segment of
Dusky Gopher Frog As Endangered, 66 Fed. Reg. 62,993 (Dec. 4, 2001).
Goaded by a lawsuit, and after notice and comment, the Service published a
final rule designating critical habitat in 2012. Designation of Critical Habitat
for Dusky Gopher Frog, 77 Fed. Reg. 35,118 (June 12, 2012) [hereinafter Final
Designation]. The critical-habitat designation included units spanning several
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thousand acres in Mississippi, and, as relevant here, Unit 1—consisting of
1,544 acres in Louisiana, which are not occupied by the dusky gopher frog. Id.
The Service was thus required to show that Unit 1—the “specific area”—is
“essential for the conservation of the [dusky gopher frog].” 16 U.S.C.
§ 1532(5)(A)(ii).
Unlike all of the Mississippi units, Unit 1 is uninhabitable by the shy
frog. Final Designation, 77 Fed. Reg. at 35,131. Unit 1, in fact, contains only
one of the three “physical and biological features” deemed necessary to dusky
gopher frog habitat—five ephemeral ponds that could support the frog’s
reproduction. Id. at 35,123, 35,132. Worse still, “[a]pproximately ninety
percent of [Unit 1] is currently covered with closed canopy loblolly pine
plantations,” and the two remaining features essential for the frog’s
conservation require an open-canopied longleaf pine ecosystem. Markle
Interests, L.L.C. v. U.S. Fish & Wildlife Serv., 827 F.3d 452, 482 (5th Cir. 2016)
(Owen, J., dissenting); Final Designation, 77 Fed. Reg. at 35,131. In the
Service’s own words, “the surrounding uplands are poor-quality terrestrial
habitat for dusky gopher frogs.” Final Designation, 77 Fed. Reg. at 35,133.
The Service admitted that without “prescribed burning” and creating a
“forested habitat (preferably longleaf pine),” among other measures, Unit 1 is
“unsuitable as habitat for dusky gopher frogs.” Id. at 35,129, 35,132.
Designating Unit 1 as critical habitat also portends significant economic
losses to the landowners in Unit 1. The Service acknowledged that critical-
habitat designation could result in economic impacts of up to $34 million,
stemming from lost development opportunities. Id. at 35,140.
Despite Unit 1’s flaws, however, the Service asserted that “the presence
of the PCEs [the physical and biological features essential for the frog’s
conservation] is not a necessary element in [the unoccupied critical habitat]
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determination.” Id. at 35,123. The Service expressed its “hope to work with
the landowners to develop a strategy that will allow them to achieve their
objectives for the property and protect the isolated, ephemeral ponds that exist
there.” Id. But of course, the Service’s preferred “tools and programs are
voluntary, and actions such as habitat management through prescribed
burning, or frog translocations to the site, cannot be implemented without the
cooperation and permission of the landowner.” Id. In addition, the Service
stated that its “economic analysis did not identify any disproportionate costs
that are likely to result from the designation.” Id. at 35,141. Therefore, the
Service included Unit 1 as unoccupied critical habitat.
The appellants in this case are landowners of Unit 1 involved in timber
operations and commercial development. Their suit alleges that because Unit
1 is uninhabitable by the dusky gopher frog, it is not “essential for the
conservation of” the frog as required for unoccupied critical habitat. They also
allege that the Service never compared the costs and benefits of designating
Unit 1 as critical habitat to support its conclusion that designation would cause
no “disproportionate” impacts. The district court granted summary judgment
in the Service’s favor.
The panel majority affirmed the district court. The panel majority first
rejected any notion that the ESA requires critical habitat to be habitable,
characterizing such a requirement as an “extra-textual limit.” Markle
Interests, 827 F.3d at 468 (majority opinion). Second, turning to whether Unit
1 met the definition of unoccupied critical habitat, the panel majority held that
“a scientific consensus as to the presence and rarity of a critical (and difficult
to reproduce) feature—the ephemeral ponds—. . . justified [the Service’s]
finding that Unit 1 was essential for the conservation of the dusky gopher frog.”
Id. at 471. According to the panel majority, “if the ponds are essential, then
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Unit 1, which contains the ponds, is essential for the conservation of the dusky
gopher frog.” 1 Id. at 472 n.20. Finally, the panel majority held that the
Service’s decision not to exclude Unit 1 from critical habitat on the basis of
economic impact was unreviewable because that decision is committed to the
Service’s discretion. Id. at 473–75. All three holdings are incorrect.
II. Contrary to the Panel Majority’s Holding, the ESA Contains a
Clear Habitability Requirement
No one disputes that the dusky gopher frog cannot inhabit Unit 1. The
panel majority find that fact irrelevant, however, because looking only at the
statute’s definitional section, the ESA does not appear to require that a species
actually be able to inhabit its “unoccupied critical habitat.” They dismiss
habitability as an “extra-textual limit” that cannot be found in either “the text
of the ESA or the implementing regulations.” Markle Interests, 827 F.3d at
468 (majority opinion). Read in context, however, the ESA makes clear that a
species’ critical habitat must be a subset of that species’ habitat. The ESA’s
implementing regulations are consistent with this subset arrangement.
Further, when Congress got around to clarifying critical-habitat regulation in
1978, the contemporary understanding of critical habitat, shared alike by the
most fervent proponents and opponents of wildlife and habitat protection, was
that it meant a part of the species’ actual habitat.
Unfortunately, the parties here failed to undertake holistic statutory
interpretation. Misled by the parties’ briefing, the panel also neglected this
effort. Another difficulty is the Ninth Circuit’s adoption of a similar, non-
1 On this issue, Judge Owen dissented, arguing that the panel majority opinion “re-writes the
Endangered Species Act” because “[n]either the words ‘a critical feature’ nor such a concept appear in
the Act.” Id. at 488 (Owen, J., dissenting). “The touchstone chosen by Congress was ‘essential,’” and
“[t]he existence of a single, even if rare, physical characteristic does not render an area ‘essential’ when
the area cannot support the species because of the lack of other necessary physical characteristics.”
Id.
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habitat interpretation of “unoccupied critical habitat.” See Bear Valley Mut.
Water Co. v. Jewell, 790 F.3d 977, 993–94 (9th Cir. 2015). Nevertheless, given
the significance of this case and the fact that the law is clear beyond dispute,
it was our court’s duty to “state what the law is.”
A. A Species’ Critical Habitat Must Be a Subset of the Species’
Habitat
The ESA states that the Service
shall, concurrently with making a determination under paragraph
(1) that a species is an endangered species or a threatened species,
designate any habitat of such species which is then considered to be
critical habitat . . . and . . . may, from time-to-time thereafter as
appropriate, revise such designation.
16 U.S.C. § 1533(a)(3)(A)(i)–(ii) (emphases added). Whatever is “critical
habitat,” according to this operative provision, must first be “any habitat of
such species.” The fact that the statutory definition of “critical habitat,” on
which the entirety of the panel opinion relies, includes areas within and
without those presently “occupied” by the species does not alter the larger fact
that all such areas must be within the “habitat of such species.”
This is not the only time Congress drew this distinction. For example,
the ESA requires federal agencies to consult with the Service to ensure that
their activities are “not likely” to result in various adverse impacts on listed
species and their critical habitats. See id. § 1536(a)(2). Such consultation is
required, inter alia, where agency activities would be likely to “result in the
destruction or adverse modification of habitat of such [endangered or
threatened] species which is determined by the Secretary, after consultation as
appropriate with affected States, to be critical[.]” Id. (emphases added). There,
too, Congress separated out the “critical” portion of the habitat from the
general “habitat of such species.” In other provisions, Congress reiterated its
focus on species’ habitats. See, e.g., id. § 1533(a)(1)(A) (listing “curtailment of
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[a species’] habitat” as a factor in determining whether the species is
endangered or threatened); id. § 1537(b)(3) (requiring the Service to encourage
foreign persons to develop and carry out “conservation practices designed to
enhance such fish or wildlife or plants and their habitat”); id. § 1537a(e)(2)(B)
(requiring the Service to cooperate with foreign nations in “identification of
those species of birds that migrate between the United States and other
contracting parties, and the habitats upon which those species depend”).
The ESA’s implementing regulations also distinguish between the
designations of “critical habitat” and “habitat.” 2 For instance, section 402
begins by explaining its “scope” in terms of critical habitat: it “interprets and
implements” section 7 of the ESA, which “imposes requirements upon Federal
agencies regarding endangered or threatened species . . . and habitat of such
species that has been designated as critical (‘critical habitat’).”
50 C.F.R. § 402.01(a). Section 402.01 goes on to list what measures are
required to guard against “the destruction or adverse modification of [‘habitat
of such species that has been designated as critical’].” Id. The consistent focus
on species’ “habitat” demonstrates, by its use in these passages, that it is a
broader concept than “critical habitat.” See, e.g., id. § 402.02 (referring to
“actions intended to conserve listed species or their habitat”); id. § 402.05(b)
(in the context of emergency consultation, referring to “impacts to endangered
or threatened species and their habitats”).
The bottom line is that the ESA’s text and implementing regulations
unequivocally establish that only “habitat of such species” may be designated
2 Other regulations reflecting on the consultation provisions make the distinction as well. See,
e.g., 32 C.F.R. § 643.32 (emphasizing the ESA requires agencies to ensure that their actions are not
likely to result in the destruction or modification of “habitat of such species which is determined . . . to
be critical”); 7 C.F.R. § 650.22(a)(3) (same); 33 C.F.R. § 320.3(i) (same).
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as critical habitat. Thus, for example, if white-tailed deer were listed as an
endangered species, their habitat would include, at a minimum, virtually all of
Texas, but their “critical habitat” would be limited to those portions of their
habitat that meet the definition of “critical habitat.”
The Service’s first task is accordingly to determine whether the land
under consideration for critical-habitat designation is “habitat of such species.”
“Habitat” is defined as “the place where a plant or animal species naturally
lives and grows.” Webster’s Third New International Dictionary 1017 (1961).
See also The Random House Dictionary of the English Language 634 (1969)
(“[T]he kind of place that is natural for the life and growth of an animal or
plant[.]”); Habitat, Black’s Law Dictionary (10th ed. 2014) (“The place where a
particular species of animal or plant is normally found.”). The question thus
becomes whether the land under consideration for critical-habitat designation
is where the species at issue naturally lives and grows or would naturally live
and grow. Only after the Service has answered that question affirmatively can
it assess whether the species’ habitat meets the statutory definition of “critical
habitat.”
B. The Evolution of the ESA Confirms that Limiting a Species’
Critical Habitat to the Species’ Habitat Was Intentional
Congress’s limitation of critical-habitat designations to the “habitat of
such species” was no accident. This limitation can be traced back to the
original text of the ESA, which in 1973 contained only two sentences on section
7 consultation, one of which briefly mentioned critical habitat:
All other Federal departments and agencies shall, in consultation
with and with the assistance of the Secretary, utilize their
authorities in furtherance of the purposes of this Act by carrying
out programs for the conservation of endangered species and
threatened species listed pursuant to section 4 of this Act and by
taking such action necessary to insure that actions authorized,
funded, or carried out by them do not jeopardize the continued
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existence of such endangered species and threatened species or
result in the destruction or modification of habitat of such species
which is determined by the Secretary, after consultation as
appropriate with the affected States, to be critical.
Endangered Species Act of 1973, Pub. L. No. 93-205, § 7, 87 Stat. 884, 892
(1973) (emphases added). This predecessor provision, like the current
consultation requirements, refers to the destruction or modification of “habitat
of such species which is determined by the Secretary . . . to be critical.” 3 From
the very beginning, Congress rooted the concept of critical habitat in the
relevant species’ actual habitat.
Controversial decisions including Tennessee Valley Authority v. Hill,
437 U.S. 153 (1978), prompted Congress in 1978 to revisit the definition of
critical habitat and the role of consultation. 4 As relevant here, Congress
amended section 1533 to require the Service at the time of listing an
3 Preservation of species’ habitat was an early goal of various interest groups. See, e.g.,
Endangered Species: Hearings on H.R. 37, H.R. 470, H.R. 471, H.R. 1461, H.R. 1511, H.R. 2669, H.R.
2735, H.R. 3310, H.R. 3696, H.R. 3795, H.R. 4755, H.R. 2169, and H.R. 4758 Before the Subcomm. on
Fisheries and Wildlife Conservation and the Environment of the H. Comm. on Merchant Marine and
Fisheries, 93d Cong. 241 (1973) (statement of A. Gene Gazlay, Director, Michigan Department of
Natural Resources: “[Proposed legislation] should affirm the well-known fact that while legal
protection and law enforcement are needed, the maintenance of suitable habitat is vital to the
restoration of threatened wildlife.”); id. at 258 (statement of Society for Animal Protective Legislation:
“Rare and endangered animals should be protected in their natural habitat to the greatest extent
possible.”); id. at 271 (statement of Howard S. Irwin, President, New York Botanical Garden: “[T]he
most serious aspect of the preservation of endangered species of plants is the preservation of their
habitats.”); id. at 299, 301 (statement of Tom Garrett, Wildlife Director, Friends of the Earth: “It
should be obvious to any of us that if we do not preserve the habitat of species, and the integrity of
biotic communities, whether or not plants or animals are protected from deliberate molestation
becomes, eventually, academic. . . . I would like to emphasize again that it is ultimately immaterial
whether or not an animal is deliberately molested if its habitat is not preserved.”); id. at 326 (statement
of Milt Stenlund, Supervisor of Game, Minnesota Department of Natural Resources: “[M]ore
importance should be placed on the habitat of the endangered species. . . . While we may be concerned
about the animal and greatly concerned about man’s effect on the animal, I am convinced that we
should be more concerned about the country, the habitat, in which the wolf lives. . . . In any
endangered species program, I would like the committee to consider the fact that the habitat in which
the endangered species live could be far more important than protection of the animal itself.”).
4 Our research on the committee hearings, floor debates, and congressional reports leading up
to the 1978 amendments indicates uniform awareness in Congress that a species’ critical habitat was
a subset of the species’ habitat.
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endangered or threatened species to “specify any habitat of such species which
is then considered to be critical habitat.” Endangered Species Act
Amendments of 1978, Pub. L. No. 95-632, § 11, 92 Stat. 3751, 3764 (1978).
Congress’s reference to the “habitat of such species” as a prerequisite to a
(usually) narrower critical-habitat designation was, in fact, not new at all. It
had been in the ESA since its inception and had become widely accepted as a
bedrock principle. That principle—plain from both text and history—is that
the Service may only designate a species’ habitat as critical habitat.
Further, this distinction is embodied in the operative provision, which tells
the Service what to do: it “shall, concurrently with [determining to list a species
as endangered or threatened], designate any habitat of such species which is
then considered to be critical habitat[.]” 16 U.S.C. § 1533(a)(3)(A)(i) (emphases
added). The definition of critical habitat, in contrast, pertains only to one term
in this provision. Critical habitat is not necessarily all habitat, but its
irreducible minimum is that it be habitat. A diagram explains this statutory
plan:
All landHabitat
Critical
of the
Habitat
Duskyof the
Gopher
Dusky
FrogGopher
Frog
Figure 1: Under the ESA, a species' critical habitat is necessarily a subset of the species' habitat.
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C. By Holding that “Critical Habitat” Has No Habitability
Requirement, the Panel Majority Contradict the ESA’s Plain
Language
What went awry with the panel majority opinion? The majority overlook
section 1533(a)(3)(A)(i) completely. This unfortunate oversight was no doubt
abetted by the facts that the Service’s Final Designation fails to quote that
operative provision, and the parties, for differing tactical reasons, did not call
this obvious matter of statutory interpretation to the panel’s attention.
Consequently, the majority’s construction of the law derives solely from the
definition of “critical habitat” and results in the following incorrect view of the
ESA:
All landHabitat
of the
Critical Dusky
Habitat Gopher
of the Frog
Dusky
Gopher
Frog
Figure 2: The panel majority's erroneous belief that the ESA has no habitability requirement means that, as the
panel majority held here, land that is uninhabitable by a species can nonetheless be its critical habitat.
The ESA sets out the following path for the critical-habitat designation
process: (1) determine whether the land in question is the species’ habitat; (2) if
so, determine whether any portion of that land meets the definition of critical
habitat; and (3) if so, designate that portion of the species’ habitat as its critical
habitat. Erroneously, the panel majority begin and end with the definition of
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critical habitat, asking only whether the land in question—even if
uninhabitable by the species—satisfies the definition. That reasoning is
fundamentally at odds with the ESA’s text, properly read, and its regulations.
The panel majority wound up sanctioning the oxymoron of uninhabitable
critical habitat based on an incorrect view of the statute.
Two objections may be made to correcting this error. First, because the
landowners didn’t proffer this exact textual analysis in their habitability
arguments, they waived it. Second, adopting this interpretation would conflict
with a Ninth Circuit decision. Neither of these objections should be persuasive.
The first objection—that this textualist argument was waived—is easily
disposed of. Throughout this litigation, the habitability issue, and the
landowners’ argument that the ESA requires a species’ critical habitat to be
habitable by that species, is well documented. Indeed, the best indication that
the habitability issue is squarely presented is the panel majority’s forceful
rejection of any “habitability requirement” in the ESA. This court traditionally
declines to address an issue only if it is not “adequately” briefed. See, e.g.,
United States v. Copeland, 820 F.3d 809, 811 n.2 (5th Cir. 2016). Given the
record, briefing, and panel majority’s sweeping dismissal of a habitability
requirement, the landowners’ preservation of the habitability issue is anything
but inadequate. Second, the logical consequence of accepting the objection
would be that litigants could force courts to interpret statutory provisions in
isolation by briefing arguments related only to those provisions. That result
would conflict with our duty to consider statutory text in light of the statutory
context. See, e.g., Serna v. Law Office of Joseph Onwuteaka, P.C.,
732 F.3d 440, 450–51 (5th Cir. 2013) (“[T]he meaning of statutory language,
plain or not, depends on context.” (quoting King v. St. Vincent’s Hosp.,
502 U.S. 215, 221 (1991))); Antonin Scalia & Bryan A. Garner, Reading Law:
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The Interpretation of Legal Texts 167 (2012) (“The text must be construed as a
whole.”). Finally, relying on waiver would create a nonsensical world where
the panel majority could cite statutory context and related regulations to say
no habitability requirement exists, 5 but a reviewing court could not cite the
same context and related regulations to say a habitability requirement does in
fact exist. This objection is meritless.
The second objection—that accepting this statutory argument would
conflict with the Ninth Circuit’s view—is simply a consequence of a more
precise textual interpretation. In Bear Valley Mutual Water Co. v. Jewell,
790 F.3d 977 (9th Cir. 2015), the Service designated unoccupied areas around
the Santa Ana River as critical habitat for the Santa Ana sucker, a small fish.
Id. at 993–94. Those areas were deemed essential to the sucker’s conservation
not because they are its habitat, but because they are “the primary sources of
high quality coarse sediment for the downstream occupied portions of the
Santa Ana River,” and the sediment enhances the sucker’s downstream
habitat. Id. The court rejected the plaintiffs’ argument that the areas did not
qualify as critical habitat because they are uninhabitable. Id. The court
believed that “[t]here is no support for this contention in the text of the ESA or
the implementing regulation, which requires the Service to show that the area
is ‘essential,’ without further defining that term as ‘habitable.’” Id.
Two thoughts in response. First, as explained above, the “no support in
the text of the ESA or implementing regulations for a habitability
requirement” line is plainly wrong.
Second, enforcing the ESA’s habitat provisions as written would not
diminish the statute’s protection of life-sustaining features that lie outside a
5 Markle Interests, 827 F.3d at 468 (“There is no habitability requirement in the text of the
ESA or the implementing regulations.”).
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species’ critical habitat. The Ninth Circuit appeared to assume that critical-
habitat designation of those unoccupied, uninhabitable areas was the only
means of protecting the life-sustaining features. That is incorrect. Section 7
consultation is required to ensure that “any action authorized, funded, or
carried out by” a federal agency is “not likely” to “result in the destruction or
adverse modification of habitat of [endangered or threatened] species which is
determined . . . to be critical.” 16 U.S.C. § 1536(a)(2). Note that the “action”
targeted by section 7 does not have to occur on designated critical habitat to
trigger section 7 consultation; it only has to have the potential to affect critical
habitat. Thus, if a landowner requested a permit to develop the unoccupied
areas in Jewell in a way that might be likely to result in the destruction or
adverse modification of the sucker’s critical habitat downstream, an agency
could not issue that permit without first going through section 7 consultation,
regardless whether the unoccupied areas are designated as critical habitat.
Consequently, the life-sustaining features would have nonetheless remained
protected under the section 7 consultation requirements. Thus, the law
protects critical habitat without the need to designate territory unoccupied by
an endangered species as critical habitat.
* * *
For these reasons, the panel majority were wrong to say that the ESA
contains no habitability requirement. Correcting this error requires only three
simple statements: (1) the ESA requires that land proposed to be designated
as a species’ critical habitat actually be the species’ habitat—a place where the
species naturally lives and grows or could naturally live or grow; (2) all parties
agree that the dusky gopher frog cannot inhabit—that is, naturally live and
grow in—Unit 1; therefore, (3) Unit 1 cannot be designated as the frog’s critical
habitat.
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III. Even Assuming No Habitability Requirement Exists, the Panel
Majority Decision Is Wrong on the Standard for Unoccupied
Critical Habitat
Let us assume arguendo that the panel, like the parties, adequately
examined the “critical habitat” definitions in section 1532(5)(A)(i)-(ii) without
reference to the necessity of “habitability.” Is the panel majority’s
interpretation correct? I submit that it is not for two reasons. First, the panel
majority’s test for unoccupied critical habitat is less stringent than the test for
occupied critical habitat. That less stringent test conflicts with the ESA’s text,
drafting history, and precedent; together, these confirm the commonsense
notion that the test for unoccupied critical habitat is designed to be more
stringent than the test for occupied critical habitat. Second, although the
majority opinion appears to recognize the dangerous breadth of its oxymoronic
holding, it fails to offer any real limiting principles. The Service itself has
actually rejected one suggested limitation, and the others are inapposite and
toothless. Judge Owen’s dissent well dissected these problems, but I add
somewhat to her reasoning.
A. The Test for Unoccupied Critical Habitat Is Supposed to Be
More Demanding than the Test for Occupied Critical Habitat
Suppose a dusky gopher frog camped out, by chance, on Unit 1. Maybe
he got there after hiding from some inquisitive biologists on another property.
Despite his fortuitous presence, Unit 1 could not be designated as critical
habitat because, as the panel acknowledges, “occupied habitat must contain all
of the relevant physical or biological features” essential to the frog’s
conservation. Markle Interests, 827 F.3d at 468 (quoting Markle Interests,
L.L.C. v. U.S. Fish & Wildlife Serv., 40 F. Supp. 3d 744, 761 (E.D. La. 2014)).
Unit 1 lacks several of these essential features.
According to the panel majority, however, Unit 1 is “critical habitat”
despite being unoccupied by the frog. Focusing solely on the presence of a
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single allegedly essential feature (the “ephemeral ponds”), the panel majority
make it easier to designate as critical habitat the land on which the species
cannot survive than that which is occupied by the species. If correct, that
remarkable and counterintuitive reading signals a huge potential expansion of
the Service’s power effectively to regulate privately- or State-owned land.
Tested against the ESA’s text, drafting history, and precedent, however, that
reading is incorrect.
1. The ESA’s Text
The ESA’s text dictates that the unoccupied critical habitat designation
is different and more demanding than occupied critical habitat designation.
Occupied critical habitats are “specific areas . . . on which are found those
physical or biological features . . . essential to the conservation of the species[.]”
16 U.S.C. § 1532(5)(A)(i) (emphasis added). Unoccupied critical habitats, in
contrast, are “specific areas. . . [that] are essential for the conservation of the
species.” Id. § 1532(5)(A)(ii) (emphasis added). Congress deliberately
distinguished between the two. For occupied habitat, the relevant specific
areas contain physical or biological features essential to the conservation of a
species. For unoccupied habitat, the specific areas themselves must be
essential for the species’ conservation.
Flowing from the difference in terminology between “features” and
“areas,” the burdens underlying the two types of designation are also different.
A “feature” is defined as “a marked element of something” or a
“characteristic.” 6 “Area” is defined as “a clear or open space of land” or “a
6 Webster’s Third New International Dictionary 832 (1986). See also The Random House
Dictionary of the English Language 520 (1969) (“a prominent or conspicuous part or characteristic”).
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definitely bounded piece of ground set aside for a specific use or purpose.” 7
Given the narrower scope of “feature” than “area,” it should be easier to prove
two or three specific features are essential to a species’ conservation (the
occupied habitat standard) than an entire area (the unoccupied habitat
standard). Suppose a eucalyptus tree is located in my yard. Whether the
tree—a feature of my homestead—is essential to koala bear conservation
would require an analysis of the tree’s attributes only. But whether my
homestead—a specific “area”—is “essential” to the species’ conservation would
be a more substantial undertaking. That analysis would assess not only the
tree’s attributes, but also the attributes of every constituent part—essential to
the species’ conservation or not—of my homestead. The analysis of an entire
(unoccupied) area thus entails a broader and more complex investigation than
an analysis of two or three features present in an area already occupied by the
species. This is what the ESA requires.
2. The ESA’s Drafting History
Before 1978, the ESA did not define critical habitat, but a regulation
stepped in to define critical habitat as
any air, land, or water area (exclusive of those existing man-made
structures or settlements which are not necessary to the survival
and recovery of a listed species) and constituent elements thereof,
the loss of which would appreciably decrease the likelihood of the
survival and recovery of a listed species or a distinct segment of its
population. The constituent elements of critical habitat include,
but are not limited to: physical structures and topography, biota,
climate, human activity, and the quality and chemical content of
land, water, and air. Critical habitat may represent any portion of
the present habitat of a listed species and may include additional
areas for reasonable population expansion.
7 Webster’s Third New International Dictionary 115 (1986). See also The Random House
Dictionary of the English Language 79 (1969) (“any particular extent of surface; geographic region;
tract” or “any section reserved for a specific function”).
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Interagency Cooperation, 43 Fed. Reg. 870, 874–75 (Jan. 4, 1978) (emphasis
added). The last sentence of that definition was the genesis of the occupied-
unoccupied dichotomy.
When Congress took up the critical habitat issue in 1978, members of
both Houses expressed concerns about the Service’s broad definition and its
potential to expand federal regulation well beyond occupied habitat. 8 Not only
did House and Senate members criticize the regulation, but Congress’s final
definition took a narrower approach to unoccupied habitat, severing
unoccupied from occupied critical habitat and placing the respective definitions
in separate provisions. 9 Mirroring the respective Houses’ proposals, 10
Congress defined occupied critical habitat in terms of essential physical and
biological features, and unoccupied critical habitat in terms of essential specific
8 For those who find legislative history relevant, the committees charged with reviewing ESA
legislation in both the House and Senate expressed these concerns. On the House side, the Committee
on Merchant Marine and Fisheries reported H.R. 14104, which defined critical habitat largely
according to the Service’s regulation. See H.R. 14104, 95th Cong., at 23 (1978) (as reported by H.R.
Comm. on Merchant Marine & Fisheries, Sept. 25, 1978). But it conspicuously excluded any reference
to “additional areas for reasonable population expansion.” See id. The committee report explains the
deliberate exclusion by instructing “the Secretary [to] be exceedingly circumspect in the designation
of critical habitat outside of the presently occupied area of the species.” H.R. Rep. No. 95-1625, at 18
(1978).
On the Senate side, the Committee on Environment and Public Works complained that the
“Service is now using the same criteria for designating and protecting areas to extend the range of an
endangered species as are being used in designation and protection of those areas which are truly
critical to the continued existence of a species.” S. Rep. No. 95-874, at 9–10 (1978) (emphasis added).
The committee thought that “[t]here seems to be little or no reason to give exactly the same status” to
unoccupied critical habitat as to occupied critical habitat. Id. at 10. The danger of this parity, in the
committee’s view, was the resulting proliferation of critical habitats, which “increases proportionately
the area that is subject to the regulations and prohibitions which apply to critical habitats.” Id.
Consequently, the committee directed the Service to reevaluate its designation processes. Id.
9 See Endangered Species Act Amendments of 1978, Pub. L. No. 85-632, 92 Stat. 3751, 3751
(1978) (codified at 16 U.S.C. § 1532).
10 See 124 Cong. Rec. 38,154, 38,159–60 (1978) (amendment of Representative Duncan to the
definition of “critical habitat” immediately prior to the House vote); 124 Cong. Rec. 21,603 (1978) (text
and passage of Senate Bill 2899).
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areas. 11 In so doing, Congress intentionally curtailed unoccupied critical
habitat designation.
3. Precedent
The Ninth Circuit has twice confirmed that unoccupied critical habitat
is a narrower concept than occupied critical habitat. In Arizona Cattle
Growers’ Ass’n v. Salazar, 606 F.3d 1160 (9th Cir. 2010), the Ninth Circuit
considered whether the Service “unlawfully designated areas containing no
[Mexican spotted] owls as ‘occupied’ habitat” instead of unoccupied habitat. Id.
at 1161. While the court ultimately rejected this argument on the ground that
the habitat in question was in fact occupied, the Ninth Circuit agreed that the
distinction between critical habitat designation of occupied and unoccupied
land is significant:
The statute thus differentiates between “occupied” and
“unoccupied” areas, imposing a more onerous procedure on the
designation of unoccupied areas by requiring the Secretary to
make a showing that unoccupied areas are essential for the
conservation of the species.
Id. at 1163.
Two months later, in Home Builders Ass’n of Northern California v.
United States Fish & Wildlife Service, 616 F.3d 983 (9th Cir. 2010), cert. denied
562 U.S. 1217 (2011), the Ninth Circuit reiterated that the unoccupied critical
habitat standard is “a more demanding standard than that of occupied critical
habitat.” Id. (emphasis added). As a result, the court concluded that the
Service’s “basing the designation [of critical habitat] on meeting the more
demanding standard [for unoccupied critical habitat] poses no problem.” Id.
(emphasis added).
11 See Endangered Species Act Amendments of 1978, Pub. L. No. 85-632, 92 Stat. 3751, 3751
(1978) (codified at 16 U.S.C. § 1532).
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District courts have consistently echoed this dichotomy. See Ctr. for
Biological Diversity v. Kelly, 93 F. Supp. 3d 1193, 1202 (D. Idaho 2015) (“The
standard for designating unoccupied habitat is more demanding than that of
occupied habitat.”); All. for Wild Rockies v. Lyder, 728 F. Supp. 2d 1126, 1138
(D. Mont. 2010) (“Compared to occupied areas, the ESA imposes ‘a more
onerous procedure on the designation of unoccupied areas by requiring the
Secretary to make a showing that unoccupied areas are essential for the
conservation of the species.’” (quoting Ariz. Cattle Growers’ Ass’n, 606 F.3d at
1163)); see also Am. Forest Res. Council v. Ashe, 946 F. Supp. 2d 1, 44 (D.D.C.
2013) (referencing “the more demanding standard for unoccupied habitat”);
Cape Hatteras Access Pres. All. v. U.S. Dep’t of Interior, 344 F. Supp. 2d 108,
119 (D.D.C. 2004) (“Thus, both occupied and unoccupied areas may become
critical habitat, but, with unoccupied areas, it is not enough that the area’s
features be essential to conservation, the area itself must be essential.”).
In sum, we know from the ESA’s text, drafting history, and precedent
that an unoccupied critical habitat designation was intended to be different
from and more demanding than an occupied critical habitat designation.
Against this backdrop, the panel majority misconstrue the statute and
create a conflict with all relevant precedent. First, the panel majority read the
word “areas” out of the definition of unoccupied critical habitat—“specific areas
. . . [that] are essential for the conservation of the species.” 16 U.S.C.
§ 1532(5)(A)(ii). The majority conclude that if one feature essential to a species’
conservation is present in a specific area, then that specific area is “essential”
for the conservation of the species. Markle Interests, 827 F.3d at 472 n.20.
Congress, however, addressed features only with respect to occupied habitat.
See 16 U.S.C. § 1532(5)(A)(i). With respect to unoccupied habitat, Congress
adopted the far more expansive term “area.” The panel majority’s test—the
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existence of one essential feature renders the area on which the feature exists
essential to a species’ conservation—collapses the definitions together by
smuggling “feature” into the definition of unoccupied critical habitat.
Second, the panel majority’s statutory interpretation not only disserves
the Congressional purpose and relevant precedent—it is the opposite of what
Congress declared. The majority say in one breath that proper designation of
occupied critical habitat requires the existence of all physical and biological
features essential to a species’ conservation, but in the next breath they say
that proper designation of unoccupied critical habitat requires only the
existence of a single such feature. See Markle Interests, 827 F.3d at 468, 472
n.20. This kind of misinterpretation is, frankly, execrable, and contrary to the
Supreme Court’s Scalia-inspired and rather consistent adoption of careful
textualist statutory exposition. (As Justice Kagan has recently declared, “We
are all textualists now.”)
Perhaps the most troubling aspect of this interpretive issue is that the
panel majority refused to address it. The landowners argued in their principal
and reply briefs that by statute, the critical habitat designation for unoccupied
areas is more onerous than for occupied areas, and the amici dedicated their
first argument to this point. Despite these forceful presentations, the panel
majority still did not address the problem. Understandably, both the
landowners and the 15 States reurge the question of statutory interpretation
in rehearing petitions. For purposes of fundamental fairness and giving due
consideration to the landowners’ argument, the landowners deserve the
answer they have not yet been given.
B. There Are No Limiting Principles in the Panel Opinion
But even if we, too, ignored that according to the statute, unoccupied
critical habitat must be defined more narrowly, substantial problems would
remain. In particular, if critical habitat designation of unoccupied areas
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depends only on the existence of one feature essential to a species’
conservation, then, as Judge Owen aptly points out, the Service has free rein
to regulate any land that contains any single feature essential to some species’
conservation. The panel majority appear to recognize this serious concern and
respond by proffering a few limiting principles, but none of them is effective.
1. An Inadequacy Determination
The panel majority initially emphasize that “the Service had to find that
the species’s occupied habitat was inadequate before it could even consider
designating unoccupied habitat as critical.” Markle Interests, 827 F.3d at 470.
Accordingly, this inadequacy requirement “provided a limit to the term
‘essential’ as it relates to unoccupied areas.” Id. See 50 C.F.R. § 424.12(e)
(2012) (“The Secretary shall designate as critical habitat areas outside the
geographical area presently occupied by a species only when a designation
limited to its present range would be inadequate to ensure the conservation of
the species.”). This is true, but misleading.
What the majority opinion does not acknowledge is that as of March 14,
2016, the Service intentionally eliminated the inadequacy requirement from
its regulations. See Implementing Changes to the Regulations for Designating
Critical Habitat, 81 Fed. Reg. 7414, 7434 (Feb. 11, 2016) (codified at
50 C.F.R. § 424.12 (2016)). The Service found that requirement “unnecessary
and unintentionally limiting.” Id. Whatever limiting effect the inadequacy
requirement may have had in this case, that effect no longer remains.
2. Future “Undesignation” of Critical Habitat
A second alleged limiting principle is that “the ESA limits critical-
habitat designations on the back end as well, because successful conservation
through critical-habitat designation ultimately works towards undesignation.”
Markle Interests, 827 F.3d at 472 n.21. In other words, it is perfectly
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permissible for the Service to designate areas unoccupied (and not capable of
being occupied) by a species as critical habitat because it is possible the areas
may sometime thereafter be “undesignated.”
That reasoning essentially approves the Service’s strong-arming private
landowners into a catch-22. With their land saddled by a critical-habitat
designation, private landowners have two choices: (1) refuse to cooperate with
federal authorities but suffer the consequences by not being allowed to develop
their land when federal permits are required, or (2) acquiesce in federal
activity on their land to further the Service’s interests. That it is theoretically
possible for the critical habitat designation to be removed sometime in the
future simply ignores the landowners’ core concern that Unit 1 should have
never been designated as critical habitat in the first place. This proposed
limiting principle limits only the landowners and utterly misses the point.
3. “Scientific Consensus As to the Presence and Rarity of a
Critical (and Difficult to Reproduce) Feature”
The panel majority proffer “rarity” as their third limiting principle. The
panel majority “hold[] only” that property unoccupied by and unsuitable for the
species may nevertheless be designated as critical habitat where there exists
“a scientific consensus as to the presence and rarity of a critical (and difficult
to reproduce) feature” that is “essential for the conservation of the dusky
gopher frog.” Markle Interests, 827 F.3d at 471. The panel majority insist that
they create no “generalized [one-feature] rule” and focus only on the facts “in
this case” which concern a critical “rare” feature. Id. at 472 n.20. This attempt
to articulate a limiting principle is ungrounded and illusory.
To begin with, the roots of this limiting principle are dubious. If this
were truly a limiting principle, one would expect it to play an important role
in the panel majority’s analysis. Yet the words “rare” and “rarity” appear only
five times in the panel majority opinion. Even that number is deceptive
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because one of the appearances is in the sentence quoted above that claims
rarity as a limiting principle, 12 and the remaining four appearances merely
reference the Service’s statements 13—leaving zero instances where the panel
majority expressly builds its analysis on “rarity.” Limiting principles should
arise not from factual recitations, but instead from considered, original
analysis of how a decision turns on the presence and absence of these facts.
Therefore, without any analysis as to how a feature’s rarity is critical to the
panel majority’s holding (and how lack of rarity would have made a difference),
it is unclear how the scope of this opinion could be limited to cases involving
rare, difficult-to-reproduce features.
This purported limiting principle is more dubious still. For all of the
panel majority’s dismissals of the landowners’ and Judge Owen’s arguments
for their alleged lack of a textual basis in the ESA, 14 one would expect to find
the panel majority’s limiting principle grounded in the ESA’s text. Wrong
again. As with the word “feature,” the words “consensus,” “rare,” “rarity,”
“difficult,” and “reproduce” appear nowhere in the unoccupied critical habitat
12 Markle Interests, 827 F.3d at 471.
13 Id. at 466 (“[The Service] explained it prioritized ephemeral ponds because of their rarity
and great importance for breeding, and because they are very difficult to replicate artificially.”); id.
(quoting the Service’s description of the ponds as “rare” and “a limiting factor in dusky gopher frog
recovery”); id. at 467 (quoting the Service’s conclusion that Unit 1 provides “[b]reeding habitat for the
dusky gopher frog in a landscape where the rarity of that habitat is a primary threat to the species[.]”);
id. at 472 n.20 (referring to the Service’s “summarizing [of] the scientific consensus [on] the rarity of”
the ponds).
14 See, e.g., id. at 468 (“The statute does not support this argument. There is no habitability
requirement in the text of the ESA or the implementing regulations.”); id. (“The Landowners’ proposed
extra-textual limit on the designation of unoccupied land—habitability—effectively conflates the
standard for designating unoccupied land with the standard for designating occupied land.”); id.
(“Thus, the plain text of the ESA does not require Unit 1 to be habitable.”); id. at 469 (“Like their
proposed habitability requirement, the Landowners’ proposed temporal requirement . . . also lacks
legal support and is undermined by the ESA’s text.”); id. at 470 (“The Landowners’ focus on private-
party cooperation as part of the definition of ‘essential’ finds no support in the text of the ESA.”); id.
at 470 n.17 (“We find no basis in the text of the statute for the ‘reasonable probability’ test introduced
by the dissent . . . .”).
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definition. See 16 U.S.C. § 1532(5)(A)(ii). One must question the validity of a
purported limiting principle that is unmoored from the ESA’s text.
But even if we were to assume these threshold problems do not exist, the
panel majority’s limiting principle would still be illusory. When is a necessary
feature rare enough? When is a necessary feature difficult enough to
reproduce? What is a sufficient “scientific consensus”? Judges are ill-suited to
decide such questions, especially when they arise from a test not rooted in
statutory text. So long as the Service claims “scientific expertise” and offers
“scientific support” using “the best scientific data available,” Markle Interests,
827 F.3d at 472 (quoting 16 U.S.C. § 1533(b)(2)), it is easy to predict that judges
will, like the panel majority, almost always defer to the Service’s decisions.
See, e.g., Medina Cty. Envtl. Action Ass’n v. Surface Transp. Bd., 602 F.3d 687,
699 (5th Cir. 2010) (“Where an agency’s particular technical expertise is
involved, we are at our most deferential in reviewing the agency’s findings.”).
This limiting principle is likely nothing more than a hollow promise—a mirage
of protection for landowners, but in reality a judicial rubber stamp on agency
action.
Without some limiting principle that cabins the panel majority’s one-
feature-suffices standard, the Service’s critical habitat designation power is
virtually limitless. Here is a sample of physical and biological features that
the Service has deemed essential to species’ conservation: “[i]ndividual trees
with potential nesting platforms,” 15 “forested areas within 0.5 mile (0.8
kilometer) of individual trees with potential nesting platforms,” 16 “aquatic
15 Determination of Critical Habitat for the Marbled Murrelet, 81 Fed. Reg. 51,348, 51,356
(Aug. 4, 2016).
16 Id.
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breeding habitat,” 17 “upland areas,” 18 and “[a] natural light regime within the
coastal dune ecosystem.” 19 These are just a few of a myriad of commonplace
“essential physical and biological features” that the Service routinely lists in
its critical habitat designations. With no real limiting principle to the panel
majority’s one-feature-suffices standard, there is no obstacle to the Service’s
claiming critical habitat wherever “forested areas” or “a natural light regime”
exist. According to the majority opinion, the Service has the authority to
designate as critical habitat any land unoccupied by and incapable of being
occupied by a species simply because it contains one of those features.
In the end, none of the panel majority’s proffered limiting principles is
persuasive, and its opinion threatens to expand the Service’s power in an
“unprecedented and sweeping” way. See Markle Interests, 827 F.3d at 481
(Owen, J., dissenting). Paraphrasing Justice Scalia, “this wolf comes as a
wolf.” Morrison v. Olson, 487 U.S. 654, 699 (1988) (Scalia, J., dissenting).
IV. The Panel Majority Play Havoc with Administrative Law by
Declaring the Service’s Decision Not to Exclude Unit 1 Non-
Judicially Reviewable
Agency action is presumptively judicially reviewable. Justice Kagan,
writing for a unanimous Court two years ago, made precisely this point when
she noted that “this Court has [] long applied a strong presumption favoring
judicial review of administrative action.” Mach Mining, LLC v. EEOC,
135 S. Ct. 1645, 1653 (2015). The panel majority jettisoned that rule to find
unreviewable the Service’s decision not to exclude Unit 1 from critical habitat
17 Designation of Critical Habitat for the Sierra Nevada Yellow-Legged Frog, the Northern
DPS of the Mountain Yellow-Legged Frog, and the Yosemite Toad, 81 Fed. Reg. 59,046, 59,102 (Aug.
26, 2016).
18 Id.
19 Designation of Critical Habitat for the Perdido Key Beach Mouse, Choctawhatchee Beach
Mouse, and St. Andrew Beach Mouse, 71 Fed. Reg. 60,238, 60,249 (Oct. 16, 2006).
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despite serious potential economic consequences. More confounding still, the
panel majority contradict the Supreme Court’s statement in Bennett v. Spear,
520 U.S. 154 (1997) that the Service’s ultimate decision is reviewable for abuse
of discretion. After providing background, I explain these problems.
A. Background
Before the Service may designate critical habitat, the Service is required
to consider various impacts that would flow from critical-habitat designation:
The Secretary shall designate critical habitat, and make revisions
thereto, under subsection (a)(3) of this section on the basis of the
best scientific data available and after taking into consideration
the economic impact, the impact on national security, and any
other relevant impact, of specifying any particular area as critical
habitat. The Secretary may exclude any area from critical habitat
if he determines that the benefits of such exclusion outweigh the
benefits of specifying such area as part of the critical habitat, unless
he determines, based on the best scientific and commercial data
available, that the failure to designate such area as critical habitat
will result in the extinction of the species concerned.
16 U.S.C. § 1533(b)(2) (emphasis added).
In this case, the Service commissioned a report to fulfill its duty to
consider economic impact. 20 Over the first 59 pages, the report explained its
methodology and the serious potential economic impacts of critical-habitat
designation. Report at 1–59. One shocking fact is that the landowners could
suffer up to $34 million in economic impact. Report at 59. Another shocking
fact is that there is virtually nothing on the other side of the economic ledger.
The Final Designation emphasized that the report “discusses the potential
economic benefits associated with the designation of critical habitat.” Final
Designation, 77 Fed. Reg. at 35,141. That discussion appears on all of about
20 The report is available here: https://www.regulations.gov/document?D=FWS-R4-ES-2010-
0024-0157. The page numbers cited above refer to the page numbers of the PDF.
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two pages in the report, and speculates that such benefits may come from
“individuals’ willingness to pay to protect endangered species” and “the public
[] hold[ing] a value for habitat conservation.” Report at 60–62. Other benefits,
the report claimed, might include “open space,” “[s]ocial welfare gains []
associated with enhanced aesthetic quality of habitat,” and “[d]ecreased
development.” Report at 61. Given the weakness and speculative nature of
these purported benefits, it is unsurprising that this discussion was relegated
to the very end of the report. The report ends—abruptly with no weighing or
comparison of costs or benefits, and no discussion of how designating Unit 1 as
critical habitat would benefit the dusky gopher frog.
The Service recognized the problems in the report and attempted to
remedy them in the Final Designation, as it explained that “the direct benefits
of the designation [of critical habitat for the dusky gopher frog] are best
expressed in biological terms.” Final Designation, 77 Fed. Reg. at 35,141. The
Service continued, “Our economic analysis did not identify any
disproportionate costs that are likely to result from the designation.
Consequently, the Secretary is not exercising his discretion to exclude any
areas from this designation of critical habitat for the dusky gopher frog based
on economic impacts.” Id.
The landowners perceived two problems with those statements in the
Final Designation. First, the Service said the direct benefits of designation are
best expressed in biological terms, but the Service never explained “in
biological terms” how designation of Unit 1 as critical habitat would directly
benefit the dusky gopher frog. Second, the Service said there were no
“disproportionate costs,” but the Service never performed a comparison of the
relevant costs. Yet the Service “[c]onsequently” based its decision not to
exclude Unit 1 from critical habitat on those two statements. Final
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Designation, 77 Fed. Reg. at 35,141. “At the very least,” the landowners thus
argued, “a reviewing court could consider whether the Service ‘offered an
explanation for its decision that runs counter to the evidence before the agency,
or is so implausible that it could not be ascribed to a difference in view or the
product of agency expertise’” (quoting Motor Vehicle Mfrs. Ass’n of U.S. v. State
Farm Mut. Auto. Ins., 463 U.S. 29, 42 (1983)). The landowners summarized
their argument on the Service’s failure to provide adequate reasons as follows:
“Because the Service failed to articulate reasons for its decision, the rule must
be vacated as to Unit 1. As currently framed, the decision is plainly arbitrary.”
The panel majority disposed of this issue by holding that “the Service’s
bottom-line conclusion not to exclude Unit 1 on the basis of [] economic impact”
“is not reviewable.” Markle Interests, 827 F.3d at 475. The panel majority
reasoned that the ESA is “silent on a standard for reviewing the Service’s
decision to not exclude an area,” and thus “[t]hat decision is committed to the
agency’s discretion and is not reviewable.” Id. at 474.
B. Problems with the Panel Majority Opinion
The panel majority falter at the starting line by never recognizing or
applying the—as Justice Kagan put it—“strong presumption favoring judicial
review of administrative action.” Mach Mining, LLC, 135 S. Ct. at 1653. This
presumption “is not easily overcome,” Gulf Restoration Network v. McCarthy,
783 F.3d 227, 235 (5th Cir. 2015), and it is certainly not overcome by the panel
majority’s nod to Heckler v. Cheney, 470 U.S. 821 (1985), which concerned the
unique (and dissimilar) context of enforcement discretion. 21
21The presumption is also not overcome by the panel majority’s protests that there are no
manageable standards by which we can review the Service’s decision not to exclude Unit 1. After all,
the Service’s decision not to exclude Unit 1 is really part and parcel of the Service’s decision to include
Unit 1, and no one disputes—or can dispute—that the Service’s decision to include Unit 1 as critical
habitat is judicially reviewable. The entire provision should be interpreted holistically. The panel
majority say the ESA “is silent on a standard for reviewing the Service’s decision to not exclude an
area,” but there is plainly a standard for reviewing the Service’s decision to include an area. It
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But more troubling still, the panel majority’s holding places this court in
tension with the Supreme Court, which has previously stated that the Service’s
ultimate decision is reviewable for abuse of discretion. In Bennett v. Spear,
520 U.S. 154, 172 (1997), the Court held that the Service’s consideration of
economic impact of critical-habitat designation is mandatory, not
discretionary. The Service had based its argument in favor of discretion on the
ESA’s permissive language: “[t]he Secretary may exclude any area from critical
habitat if he determines that the benefits of such exclusion outweigh the
benefits of specifying such area as part of the critical habitat.” Id. (quoting 16
U.S.C. § 1533(b)(2)). The Court rejected that argument, stating that “the fact
that the Secretary’s ultimate decision is reviewable only for abuse of discretion
does not alter the categorical requirement that, in arriving at his decision, he
‘tak[e] into consideration the economic impact and any other relevant impact,’
and use ‘the best scientific data available.’” Id. (quoting 16 U.S.C.
§ 1533(b)(2)). In other words, regardless whether the Service properly
considers economic impact, the Service’s ultimate decision regarding
designation of critical habitat is reviewable for abuse of discretion.
The panel majority opinion clashes with Bennett’s holding that the
Service’s “ultimate decision” is reviewable for abuse of discretion. Oddly (given
the panel majority’s numerous references to Bennett, see Markle Interests,
827 F.3d at 460, 462, 464, 474), the panel majority never confront, much less
distinguish, Bennett. But it is telling that intervenors on the side of the
Service—the Center for Biological Diversity and the Gulf Restoration
Network—acknowledged, citing Bennett, that “[e]ven if the decision not to
mandates consideration of economic impacts, national security impacts, and any other relevant
impacts of critical-habitat designation. See 16 U.S.C. § 1533(b)(2). And the decision to exclude an
area is based on cost-benefit analysis. Id.
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exclude could be reviewed, FWS’s decision can be reversed only if it abused its
discretion.” The panel majority never engaged Bennett’s clear signal that the
Service’s decision is reviewable.
The landowners maintain that the Service’s decision to include Unit 1
was procedurally flawed, and, pursuant to the presumption of judicial review
and Bennett, that decision is judicially reviewable, if only under the narrow
arbitrary and capricious standard. The panel majority’s refusal to conduct
judicial review is insupportable and an abdication of our responsibility to
oversee, according to the APA, agency action.
V. Conclusion
Each of the three issues highlighted in this dissent illustrates the
importance of further review. The panel majority’s non-textual interpretations
of the ESA misconstrue Congress’s efforts to prescribe limits on the designation
of endangered species’ habitats and encourage aggressive, tenuously based
interference with property rights. The majority’s disregard for the
presumption of judicial review, effectuated in the ESA’s text and by Bennett,
deprives states and private landowners of needful protection by the federal
courts.
For these reasons, I respectfully dissent.
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