Carpenters Industrial Council v. Ryan Zinke

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 15, 2016 Decided April 11, 2017
No. 15-5304
CARPENTERS INDUSTRIAL COUNCIL, ET AL.,
APPELLANTS
LEWIS COUNTY, A MUNICIPAL CORPORATION OF THE STATE OF
WASHINGTON, ET AL.,
APPELLANTS
v.
RYAN ZINKE AND JAMES KURTH,
APPELLEES
Consolidated with 15-5334
Appeals from the United States District Court
for the District of Columbia
(No. 1:13-cv-00361)
Mark C. Rutzick argued the cause and filed the briefs for
appellants Carpenters Industrial Council, et al.
Susan Elizabeth Drummond argued the cause for
appellants Lewis County, et al. With her on the briefs was
Ryan A. Smith.
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Michael T. Gray, Attorney, U.S. Department of Justice,
argued the cause for appellees. With him on the brief was John
C. Cruden, Assistant Attorney General. Brian C. Toth,
Attorney, entered an appearance.
Before: GRIFFITH, KAVANAUGH, and SRINIVASAN, Circuit
Judges.
Opinion for the Court filed by Circuit Judge KAVANAUGH.
KAVANAUGH, Circuit Judge: When the Government
adopts a rule that makes it more difficult to harvest timber from
certain forest lands, lumber companies that obtain timber from
those forest lands may lose a source of timber supply and suffer
economic harm. In recent years, that phenomenon has
occurred in the Pacific Northwest. In this case, a lumber
industry group has contested one such government action.
In 2012, the U.S. Fish and Wildlife Service issued a Final
Rule designating 9.5 million acres of federal forest lands in
California, Oregon, and Washington as critical habitat for the
northern spotted owl. To put the agency’s action in
perspective, the designated critical habitat area is roughly twice
the size of the State of New Jersey. For Easterners, imagine
driving all the way up and then all the way back down the New
Jersey Turnpike, and you will get a rough sense of the scope of
the critical habitat designation here. The critical habitat
designation means that a huge swath of forest lands in the
Pacific Northwest will be substantially off-limits for timber
harvesting.
Various lumber companies that obtain timber from those
forest lands are members of a trade association known as the
American Forest Resource Council. The Council sued the U.S.
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Fish and Wildlife Service to challenge the legality of the
critical habitat designation.
The threshold question is whether the Council has standing
to challenge the critical habitat designation on behalf of its
members. The District Court ruled that the Council lacked
standing. We disagree. The Council has demonstrated a
substantial probability that the critical habitat designation will
cause a decrease in the supply of timber from the designated
forest lands, that Council members obtain their timber from
those forest lands, and that Council members will suffer
economic harm as a result of the decrease in the timber supply
from those forest lands. Therefore, in light of our decision in
Mountain States Legal Foundation v. Glickman, 92 F.3d 1228(D.C. Cir. 1996), we conclude that the Council has standing.
We reverse the judgment of the District Court and remand the
case for further proceedings.
I
In 1973, Congress passed and President Nixon signed the
Endangered Species Act. The Act seeks to conserve animal
species that are at risk of extinction. See 16 U.S.C. § 1531 et
seq. The Act authorizes the Secretary of the Interior to list
species that are endangered or threatened, and to protect those
species’ habitats and ecosystems. See id. § 1533. An agency
within the Department of the Interior – the Fish and Wildlife
Service – helps implement the Act and is responsible for listing
species as endangered or threatened.
When the Fish and Wildlife Service lists a species as
endangered or threatened, it must also “designate any habitat”
of the species “which is then considered to be critical habitat.”
Id. § 1533(a)(3)(A)(i). The Act defines “critical habitat” to
include the “specific areas within the geographical area
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occupied by the species, at the time it is listed” or the “specific
areas outside the geographical area occupied by the species at
the time it is listed” if such areas are determined to be “essential
for the conservation of the species.” Id. § 1532(5)(A)(i)-(ii).
Designation of land as critical habitat triggers certain
consulting requirements under Section 7 of the Act. Any
federal agency seeking to authorize, fund, or carry out an action
on designated land must first consult with the Service to ensure
that the action is “not likely to . . . result in the destruction or
adverse modification” of critical habitat. Id. § 1536(a)(2).
The northern spotted owl is listed as a threatened species
by the Fish and Wildlife Service. In 2012, the Service issued a
Final Rule designating more than 9.5 million acres of federal
forest lands in California, Oregon, and Washington as critical
habitat for the northern spotted owl. See Designation of
Revised Critical Habitat for the Northern Spotted Owl, 77 Fed.
Reg. 71,876 (Dec. 4, 2012).
Of the lands designated as critical habitat, more than three
million acres are “matrix lands.” Matrix lands are lands that
were previously set aside by federal statute and regulation to
provide a steady supply of federal timber to the local lumber-
based economy. See Oregon and California Railroad and Coos
Bay Wagon Road Grant Lands Act of 1937, 43 U.S.C. § 1181a
et seq.; Record of Decision for Amendments to Forest Service
and Bureau of Land Management Planning Documents Within
the Range of the Northern Spotted Owl, at 7 (April 13, 1994);
see also Designation of Revised Critical Habitat for the
Northern Spotted Owl, 77 Fed. Reg. at 71,880 (matrix areas are
lands where “timber harvest would be the goal”).
The Bureau of Land Management is a federal agency
within the Department of the Interior. The Bureau of Land
5
Management is the federal agency primarily responsible for
administering and selling timber from the matrix lands. As a
result of the Fish and Wildlife Service’s critical habitat
designation, the Bureau of Land Management and other
agencies responsible for managing federal forest lands must
consult with the Service to ensure that any action that they take
– including approving the harvest of timber for sale from
matrix lands – will not result in “adverse modification” of
critical habitat. In practice, because logging affects habitat, the
critical habitat designation means that certain lands that were
previously available as a source of timber are unlikely to still
be available. Indeed, as the Fish and Wildlife Service itself
acknowledged in the Final Rule, the critical habitat designation
means that timber-harvesting activity on designated lands will
be limited, and that “traditional clearcutting” of timber will be
disfavored. Designation of Revised Critical Habitat for the
Northern Spotted Owl, 77 Fed. Reg. at 71,941.
A forest products manufacturing trade association known
as the American Forest Resource Council represents lumber
companies that obtain timber from those designated forest
lands. On behalf of its member lumber companies, the Council
sued in the U.S. District Court to challenge the legality of the
critical habitat designation. The Council claimed, among other
things, that the Service did not make use of the “best scientific
data available” when finalizing the critical habitat designation,
as required by the Endangered Species Act. 16 U.S.C.
§ 1533(b)(2).
To demonstrate its standing to challenge the critical habitat
designation, the Council submitted a declaration from its
president, Thomas Partin. In the declaration, Partin asserted
that many of the Council’s lumber companies depend on
federal timber sold from the designated lands. Partin alleged
that the critical habitat designation will decrease the supply of
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federal timber from the designated lands, which in turn will
cause his member companies to suffer economic harm.
Notably, the Fish and Wildlife Service did not challenge
the standing of the Council (or any of the other parties) when
the case was filed in the District Court. Both sides later
submitted summary judgment briefs, and, again, the Service
did not question the Council’s standing. The Service’s failure
to raise a standing argument no doubt was a considered
decision. The Service presumably thought it obvious at the
time that the Council had standing.
While the summary judgment motions were pending,
however, this Court decided Swanson Group Manufacturing
LLC v. Jewell, 790 F.3d 235 (D.C. Cir. 2015). Swanson
involved a challenge by a group of lumber industry plaintiffs
to the Bureau of Land Management’s failure to sell statutorily
required amounts of timber. The Court in Swanson held that
the plaintiffs’ declarations did not establish standing because
they were conclusory and failed to show that the challenged
agency action would cause economic injury to the plaintiffs.
Id. at 242-44.
Shortly after Swanson was decided, the District Court
understandably wanted to determine whether that case affected
the standing analysis in this case. The Court issued an order to
the Council and the other plaintiffs to “show cause in writing”
why their case “should not also be dismissed for lack of
standing” based on Swanson. Show Cause Order at 1,
Carpenters Industrial Council v. Jewell, 139 F. Supp. 3d 7(D.D.C. 2015) (No. 13-cv-00361) (J.A. 106). In response, the
Council cited Mountain States Legal Foundation v. Glickman,
92 F.3d 1228 (D.C. Cir. 1996), and Swanson, and argued that
it had standing based on the asserted economic injuries of its
member companies. The Service filed a response to the show
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cause order in which it argued, for the first time, that the case
should be dismissed for lack of standing.
The District Court ruled that the Council lacked standing.
The District Court reasoned that the Council’s allegations of
economic harm were “indistinguishable from the conclusory
allegations of economic harm” that the Swanson Court held
were insufficient to support standing. Carpenters Industrial
Council, 139 F. Supp. 3d at 12. The District Court granted
summary judgment for the Service. The Council appealed. We
review the District Court’s standing determination de novo.
II
The Constitution confines the jurisdiction of federal courts
to “Cases” and “Controversies.” U.S. CONST. art. III, § 2, cl.
1. The case-or-controversy requirement means, among other
things, that a plaintiff must demonstrate standing to sue. To
establish Article III standing, a plaintiff must allege (i) a
“concrete and particularized” injury that is “actual or
imminent”; (ii) that the injury is caused by the challenged
conduct of the defendant; and (iii) that the requested relief is
likely to redress the injury. Lujan v. Defenders of Wildlife, 504
U.S. 555, 560-61 (1992) (internal quotation mark omitted). An
organization such as the American Forest Resource Council
may establish standing by showing that at least one of its
members would have standing to sue in its own right. See
Sierra Club v. FERC, 827 F.3d 59, 65 (D.C. Cir. 2016).
To establish that it had standing in this case to challenge
the critical habitat designation on behalf of its member
companies, the Council submitted the declaration of Council
President Thomas Partin. See Declaration of Thomas L. Partin
(J.A. 85). Partin’s declaration asserts that several lumber
companies are members of the Council, and that those lumber
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companies obtain timber from lands now designated as critical
habitat. The declaration states that the critical habitat
designation will decrease the availability of the companies’
source of timber supply, which in turn will cause them to suffer
economic injury. The Council contends that Partin’s
declaration suffices to establish Article III standing. We agree.
Where, as here, a plaintiff alleges that it will suffer future
economic harm as the result of a government action, the
complaint and declarations must together demonstrate a
substantial probability of injury-in-fact, causation, and
redressability. See Sierra Club v. Jewell, 764 F.3d 1, 7 (D.C.
Cir. 2014); Chamber of Commerce v. EPA, 642 F.3d 192, 200-
01 (D.C. Cir. 2011). Of course, courts do not conduct separate
mini-trials on injury-in-fact, causation, and redressability.
Rather, courts do their best based on the complaint and
declarations to assess whether the plaintiff’s assertions suffice
to show the elements of standing.
The Council contends that the critical habitat designation
will decrease the timber supply from designated lands and thus
cause its member lumber companies to suffer economic harm.
Economic harm to a business clearly constitutes an injury-in-
fact. And the amount is irrelevant. A dollar of economic harm
is still an injury-in-fact for standing purposes. See Czyzewski
v. Jevic Holding Corp., No. 15-649, slip op. at 11 (U.S. 2017)
(“For standing purposes, a loss of even a small amount of
money is ordinarily an ‘injury.’”); Wallace v. ConAgra Foods,
Inc., 747 F.3d 1025, 1029 (8th Cir. 2014) (“The consumers’
alleged economic harm – even if only a few pennies each – is
a concrete, non-speculative injury.”).
Causation is the more difficult question when considering
allegations of future economic harm arising from government
action that decreases a business’s ability to obtain a necessary
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raw material. 1 The judicial task of determining causation can
be imprecise at times (and “imprecise” is probably a generous
description). Courts must make a predictive judgment about a
notoriously difficult issue – causation – based merely on the
complaint and declarations. When performing that inherently
imprecise task of predicting or speculating about causal effects,
common sense can be a useful tool.
This case involves lumber manufacturers that directly
obtain their raw material (timber) from certain forest lands.
The lumber manufacturers contend that the government action
in question decreases the supply of that raw material from those
forest lands. Common sense and basic economics tell us that a
business will be harmed by a government action when (i) the
government action decreases the supply of a raw material from
a source that the business relies on and (ii) the business cannot
find a replacement without incurring additional cost. Indeed,
this Court has already articulated a clear standing rule
reflecting that principle. In Mountain States Legal Foundation
v. Glickman, 92 F.3d 1228 (D.C. Cir. 1996), we said:
“Government acts constricting a firm’s supply of its main raw
material clearly inflict the constitutionally necessary injury.”
Id. at 1233. Note that “inflict” is a synonym for “cause.”
We therefore can break down the standing inquiry in this
kind of case into three analytical steps. The standing inquiry
boils down to whether the plaintiff has adequately
demonstrated: (1) a substantial probability that the challenged
government action will cause a decrease in the supply of raw
material from a particular source; (2) a substantial probability
1
Causation and redressability typically “overlap as two sides of
a causation coin.” Dynalantic Corp. v. Department of Defense, 115
F.3d 1012, 1017 (D.C. Cir. 1997). After all, if a government action
causes an injury, enjoining the action usually will redress that injury.
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that the plaintiff manufacturer obtains raw material from that
source; and (3) a substantial probability that the plaintiff will
suffer some economic harm as a result of the decrease in the
supply of raw material from that source. The Council has made
those showings in this case.
First, as the complaint and Partin’s declaration both assert,
the Service’s designation will likely cause a decrease in the
supply of timber from designated forest lands. The Service’s
argument to the contrary belies the text, purpose, and operation
of the Final Rule designating the critical habitat in this case.
Not to mention, it defies basic common sense. In the Rule, the
Service states that the “primary habitat threat to the northern
spotted owl is from commercial timber harvest.” Designation
of Revised Critical Habitat for the Northern Spotted Owl, 77
Fed. Reg. 71,876, 71,986 (Dec. 4, 2012) (emphasis added). To
protect the owl’s habitat, the Service first recommends that the
Forest Service and the Bureau of Land Management “conserve
older forest, high-value habitat, and areas occupied by northern
spotted owls.” Id. at 71,877 (emphasis added). To that end,
the critical habitat designation provides that timber-harvesting
activity on designated lands should be limited, and that
“traditional clearcutting” of timber will be disfavored. Id. at
71,941. The decrease in the timber supply is likely to be
significant. After all, we are talking about an area roughly
twice the size of the state of New Jersey, much of which could
previously be harvested for timber but which is now
substantially off-limits to logging. The text of the Rule
therefore confirms what common sense suggests. A regulation
that imposes restrictions on the Government’s ability to offer
timber from designated forest lands for harvest is substantially
probable to cause a decline in the timber supply from those
lands.
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Second, Partin’s declaration shows that several of the
lumber companies that are Council members obtain their
supply of timber from those designated forest lands. For
example, in a discussion of Council member company Rough
& Ready Lumber, Partin states that Rough & Ready “has
always primarily relied on” timber from the designated lands
to operate its mill. Partin Decl. ¶ 10. Partin similarly alleges
that Council member Seneca Sawmill Company “relies
heavily” on designated lands “for its timber supply.” Id. ¶ 12.
Partin asserts that yet another Council member, Trinity River
Lumber Company, “purchases logs” from designated forest
lands to “supply its mill.” Id. ¶ 17.
Third, the Partin declaration also demonstrates that the
decrease in the supply of timber from those designated lands is
substantially probable to cause those lumber companies
economic harm. When a company loses a source of supply of
a raw material, it may not be able to find a replacement source,
much less one at the same cost. Unless the company can fully
replace the source of supply at zero additional cost to the
company (and by zero, we mean zero), then the company has
suffered an economic harm. That is Economics 101 and
Standing 101. And according to Partin, that is the situation that
several Council member companies face as a result of the
critical habitat designation. Partin alleges that a number of
Council member companies “have lost sales of their
manufacturing products,” and are “threatened with the future
loss of such sales, due to their inability to obtain enough timber
from the Forest Service and the BLM to meet the demand of
their customers.” Id. ¶ 18; see also id. ¶ 17 (“Trinity River is
experiencing log shortages leading to economic losses, and
expects to continue to do so in the future, due to restrictions
imposed by” the critical habitat designation.). Further, Partin
alleges that Council member Seneca Sawmill Company
“cannot maintain its current production level without a steady
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or increasing supply of federal timber.” Id. ¶ 12. Partin makes
similar assertions with respect to member company Rough &
Ready, noting that Rough & Ready’s “ultimate success will
continue to depend on a reliable federal timber sale program,
which is severely threatened” by the critical habitat
designation. Id. ¶ 10. Indeed, Partin does not merely claim that
the companies will have some modestly increased costs
associated with finding a new source of supply. Partin asserts
that “without a reliable and adequate supply” of timber from
the designated lands, several of the Council’s member
companies “cannot continue to operate.” Id. ¶ 5.
In short, the available evidence adequately demonstrates:
(1) that the critical habitat designation is substantially probable
to cause a decrease in the timber supply from designated forest
lands; (2) that it is substantially probable that Council member
companies – in particular, Seneca Sawmill and Rough &
Ready – obtain timber from those forest lands; and (3) that the
decrease of the timber supply from those forest lands is
substantially probable to cause those Council member
companies to suffer economic harm. Therefore, the Council
has adequately demonstrated injury-in-fact (namely, the
economic harm), causation, and redressability. The Council
has standing to challenge the critical habitat designation on
behalf of its member lumber companies.
This Court reached a similar conclusion in Mountain
States Legal Foundation v. Glickman, 92 F.3d 1228 (D.C. Cir.
1996). In Mountain States, various lumber companies
challenged a Forest Service land management plan that would
have decreased the supply of timber from Montana’s Upper
Yaak Area (a much smaller area than is at issue in this case).
See id. at 1231. The companies argued that they had standing
to challenge the Forest Service plan because, by decreasing the
supply of Upper Yaak timber, the plan would deprive them of
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a source of timber and therefore cause them to suffer economic
harm. See id. at 1232-33. As we noted above, in analyzing
whether the companies’ allegations of economic harm sufficed
for standing, the Mountain States Court articulated a clear and
commonsensical standing principle: “Government acts
constricting a firm’s supply of its main raw material clearly
inflict the constitutionally necessary injury.” Id. at 1233.
The Mountain States Court examined the declaration of
lumber company owner James Hurst in light of that principle.
Hurst’s declaration asserted that his lumber company depended
on timber from the Upper Yaak Area affected by the challenged
government action. Hurst noted that a “large part” of his
company’s “long term operation plans” was “timber to be
supplied from” the Upper Yaak Area. See Declaration of
James L. Hurst ¶ 4, Mountain States, 92 F.3d 1228. Given that
dependence, Hurst alleged that his company would suffer
economic harm as a result of the reduction in the supply of
Upper Yaak timber. Id. Indeed, Hurst stated that his company
had already experienced “a temporary closing” and “a
permanent lay off of over 25 workers” due to its inability to
obtain timber from the Upper Yaak Area. Id.In other words, the Hurst declaration closely resembles the
Partin declaration in this case. Hurst’s declaration established:
(1) a substantial probability that the Forest Service’s action
would cause a decrease in the supply of timber from the Upper
Yaak Area; (2) a substantial probability that Hurst’s company
obtained its timber from that source of supply; and (3) a
substantial probability that Hurst’s company would suffer
some economic harm as a result of the decrease in the timber
supply from that source.
Based on the Hurst declaration, the Mountain States Court
concluded that “logging cutbacks in the Upper Yaak” cause
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injury to the “economic well-being” of Hurst’s company,
“which an order reducing the cutbacks would redress.”
Mountain States, 92 F.3d at 1233. The Court held that Hurst’s
company had standing to challenge the Forest Service plan
based on injuries to its “economic interests from curtailment of
logging.” Id. at 1232.
The decision in Mountain States therefore fully supports –
indeed, compels – our conclusion here that the Council has
sufficiently demonstrated its standing to challenge the critical
habitat designation in this case.
The Service points, however, to this Court’s post-
Mountain States decision in Swanson Group Manufacturing
LLC v. Jewell, 790 F.3d 235 (D.C. Cir. 2015). In Swanson,
various lumber companies, including a few of the plaintiff
companies in this case, challenged the Bureau of Land
Management’s failure to sell statutorily required amounts of
timber from federal lands. Id. at 238-39. The companies
alleged that the shortages threatened to cause them economic
injury. See id. at 240. Analyzing the declarations that the
companies offered to show their standing, the Swanson Court
concluded that the declarations failed to establish standing
because they contained only “conclusory” and “uncertain”
allegations. Id. at 242. In particular, the Swanson Court
concluded that the declarations failed to establish a substantial
probability that the lumber companies would suffer some
economic harm as a result of the decrease in the supply of
timber from federal lands. Id. at 242-44.
In reaching that conclusion, the Swanson Court focused on
the particular allegations contained in the declarations before
it. Cf. id. at 238 (“The question before this court is not whether
parties such as these plaintiffs could have standing to bring the
claims at issue but whether the evidence the plaintiffs presented
15
in support of their standing is sufficient.”). The Court pointed
to the fact that the declarations did not “indicate the extent” of
the companies’ “reliance on timber purchased” from the lands
at issue in the suit. Id. at 243. By contrast here, however,
Partin’s declaration in this case asserts that Rough & Ready
Lumber “has always primarily relied” on federal timber from
designated lands to operate its business and that another
company, Seneca Sawmill, “relies heavily for its timber supply
from federal lands in Oregon managed by the BLM and Forest
Service.” Partin Decl. ¶¶ 10, 12.
The Swanson Court also faulted the lumber companies’
declarations because – unlike the declaration in Mountain
States – they contained only “conclusory allegations” about the
effect that the challenged government action would have on
their businesses. Swanson, 790 F.3d at 242 (internal quotation
marks omitted). The Swanson Court further noted that the
declarations did not contain evidence that any of the
companies’ asserted injuries were attributable to “inadequate”
timber supply as opposed to “an independent source, such as
the recession.” Id. at 243. Here, like the declaration in
Mountain States but unlike the declarations in Swanson, the
Partin declaration links the member companies’ alleged
economic harms – harms ranging from lost sales and
diminished production to closures and layoffs – with the
decrease in the supply of timber from designated lands. See,
e.g., Partin Decl. ¶ 10 (Rough & Ready’s prior closure and
layoffs “due to its inability to secure enough federal timber”
from designated lands); id. ¶ 17 (“Trinity River is experiencing
log shortages leading to economic losses . . . due to restrictions
imposed by” critical habitat designation.).
In short, under our precedents, the Council has sufficiently
demonstrated standing. Because we conclude that the
American Forest Resource Council has standing to challenge
16
the critical habitat designation, we need not address whether
the other plaintiffs have standing. See Mountain States, 92
F.3d at 1232 (If constitutional standing “can be shown for at
least one plaintiff, we need not consider the standing of the
other plaintiffs to raise that claim.”).
***
We conclude that the American Forest Resource Council
has standing to challenge the U.S. Fish and Wildlife Service’s
2012 designation of critical habitat for the northern spotted
owl. We therefore reverse the judgment of the District Court
and remand to the District Court for further proceedings.
So ordered.