Otay Mesa Property, L.P. v. United States Department of the Interior

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
)
OTAY MESA PROPERTY, L.P., et al., )
)
PLAINTIFFS, )
)
v. ) Civil Action No. 13-cv-0240 (KBJ)
)
UNITED STATES DEPARTMENT OF )
THE INTERIOR, et al., )
)
DEFENDANTS. )
)
MEMORANDUM OPINION
Plaintiffs Otay Mesa Property, L.P., Rancho Vista Del Mar, and Otay
International, LLC (collectively “Otay Mesa” or “Plaintiffs”) own land that is located in
San Diego County, California, near the border between the United States and Mexico.
In 2012, the United States Fish and Wildlife Service (“the FWS”) promulgated a rule
that designates 57 acres of Otay Mesa’s land as a “critical habit” for the endangered
Riverside fairy shrimp. See 50 C.F.R. § 17.95. Otay Mesa has plans to build a
recycling facility and landfill on a portion of the designated property, and it has filed
the instant action against the U.S. Department of the Interior and its Secretary, the FWS
and its Director, and the Assistant Secretary of the Interior for Fish, Wildlife, and Parks
(collectively “Defendants”), seeking a court order that declares unlawful and sets aside
the portion of the FWS rule that designates the property as a critical habitat. Otay
Mesa’s one-count complaint asserts that the FWS’s critical habitat determination, which
will likely result in various restrictions on Plaintiffs’ use of the land, violates the
Administrative Procedure Act (“APA”), 5 U.S.C. §§ 701–706, because it is arbitrary,
capricious, and contrary to the provisions of the Endangered Species Act (“ESA”), 16
U.S.C §§ 1531–1544, and the National Environmental Policy Act (“NEPA”), 42 U.S.C
§§ 4321–4347.
Before this Court at present are the parties’ cross-motions for summary
judgment. Otay Mesa maintains that it is entitled to judgment as a matter of law
because the record clearly demonstrates that the process that the FWS used to determine
whether or not Otay Mesa’s property should be declared a critical habit for the
Riverside fairy shrimp was flawed, and thus the agency reached the wrong conclusion.
Specifically, Otay Mesa maintains that the FWS (1) wrongly designated the property as
a critical habitat even though it does not qualify as such under the ESA; (2) conducted a
faulty economic analysis with respect to the critical habitat designation; (3) improperly
neglected to perform a NEPA analysis of possible environmental impacts of the critical
habitat designation; and (4) failed to articulate its reasons for determining that
preservation of all 57 acres is essential to conservation of the species. (Pls.’ Mem. in
Supp. of Summ. J. (“Pls.’ Mem.”), ECF No. 9-1, at 9–10, 13–14.) 1 Defendants assert
that they are entitled to summary judgment because Otay Mesa does not have standing
to sue (Defs.’ Combined Opp’n to Pls.’ Mot. for Summ. J. & Mem. in Supp. of Cross-
Mot. for Summ. J. (“Defs.’ Mem.”), ECF No. 14-1, at 10), and with respect to the
merits of Otay Mesa’s APA claim, Defendants argue that the FWS’s critical habitat
determination was not arbitrary or capricious in violation of the APA because the
agency conducted a proper economic analysis, reasonably determined that a NEPA
analysis was not warranted, and has articulated rational and well-supported reasons for
1
Page numbers herein refer to those that the Court’s electronic case filing system automatically
assigns.
2
concluding that Otay Mesa’s property qualifies a critical habitat for ESA purposes (id.
at 10–11).
On September 30, 2015, this Court issued an order that DENIED both parties’
cross motions for summary judgment WITHOUT PREJUDICE. (ECF No. 29.) This
Memorandum Opinion explains the reasons for that order. In short, this Court finds that
Otay Mesa has standing to bring this action and that the FWS did not act arbitrarily or
capriciously with respect to its economic analysis and NEPA determination. In
addition, this Court concludes that the FWS made a rational determination that the
watershed area surrounding the pond on Otay Mesa’s property where the Riverside fairy
shrimp live is essential to the conservation of the species, and thus, at least some
portion of the land at issue qualifies as a critical habitat under the ESA. However, this
Court cannot determine on the record before it whether the FWS has acted arbitrarily in
concluding that 56 acres of land surrounding the one-acre pond is, in fact, watershed,
because the portion of the administrative record that was submitted to the Court does
not explain how the FWS determined that all of the geographic area that it designated as
critical habitat qualifies as such. Consequently, and as set forth in the order this Court
previously issued, each side will have an opportunity to augment the Administrative
Record Appendix and to file supplemental briefs that are limited to this factual issue.
I. BACKGROUND
A. Statutory And Regulatory Framework
1. The FWS’s Role In Implementing The Endangered Species
Act
Congress enacted the Endangered Species Act in 1973 with the aim of
conserving and protecting endangered and threatened species and the ecosystems on
3
which those species depend. See 16 U.S.C. § 1531(b). A species is “endangered” under
the ESA if it is “in danger of extinction throughout all or a significant portion of its
range[,]” and a species is “threatened” under the ESA if it is “likely to become an
endangered species within the foreseeable future throughout all or a significant portion
of its range.” Id. § 1532(6), (20). The Department of the Interior administers the ESA
for non-marine species and has delegated to the Fish and Wildlife Service (an agency
within the Interior Department) the authority to list such species as “endangered” or
“threatened” through rulemaking. See 50 C.F.R. § 402.01 (2015); see also Bangor
Hydro-Elec. Co. v. FERC, 78 F.3d 659, 661 (D.C. Cir. 1996) (noting that the FWS is
“an arm of the Department of Interior”). 2
Species that the FWS lists as endangered or threatened receive certain
protections under Federal, State, and local law, which the FWS refers to as “baseline”
protections. For example, Section 7 of the ESA requires federal agencies to consult
with the FWS to “insure that any action authorized, funded, or carried out by such
agency . . . is not likely to jeopardize the continued existence of any endangered or
threatened species[.]” 16 U.S.C. § 1536(a)(2). Section 9 of the ESA prohibits the
“take” of endangered wildlife, where “take” means to “harass, harm, pursue, hunt,
shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such
2
Under the ESA, the FWS makes a determination regarding whether or not a species should be listed
based on a number of factors affecting its continuing existence, including the current status of the
species’ habitat, overutilization of the species, disease or predation impacting the species, and whether
existing regulations are adequate to protect the species. 16 U.S.C. § 1533(a)(1). Whereas prior
environmental statutes prohibited the listing of a species “if it was still flourishing anywhere[,]” Frank
F. Grad, Treatise on Envt’l Law Ch. 12, § 12.04[7][b], the ESA now permits the FWS to list a species
that is threatened or endangered throughout “a significant portion of its range,” where “range” is
defined as “the general geographical area within which the species is currently found, including those
areas used throughout all or part of the species’ life cycle, even if not used on a regular basis.” 79 Fed.
Reg. 37578, 37579, 37583 (July 1, 2014).
4
conduct.” 16 U.S.C. §§ 1532(19), 1538(a)(1); 50 C.F.R. § 17.21(c). And Section
10(a)(1)(B) authorizes landowners and local governments who desire to engage in
activities or projects that may incidentally result in the take of a protected species to
apply for a permit by demonstrating, among other things, that “the applicant will, to the
maximum extent practicable, minimize and mitigate the impacts of such taking [and
that] the taking will not appreciably reduce the likelihood of the survival and recovery
of the species in the wild[.]” 16 U.S.C. § 1539(a)(1)(B), (2)(A)–(B). Similar
protections for endangered and threatened species exist on the state level; for example,
California requires state government entities that are responsible for project approval
under the California Environmental Quality Act to consider the environmental effects of
certain proposed projects. See Cal. Pub. Res. Code §§ 21000–21189.3; see also id.
§ 21002.1.
Pursuant to the ESA, the FWS is required to employ the best available scientific
and commercial data when it makes the initial determination regarding whether or not a
particular species should be listed as endangered or threatened. See 16 U.S.C.
§ 1533(a)–(b). Moreover, the agency’s decision to list a species as fitting within one of
these protected categories “must be made without reference to economic costs or private
property impacts.” Safari Club Int’l v. Jewell, 960 F. Supp. 2d 17, 30 (D.D.C. 2013)
(emphasis added) (internal quotation marks and citations omitted); see also 16 U.S.C.
§ 1533(b)(1)(A) (stating that listing determinations must be made “solely on the basis
of the best scientific and commercial data available”). The FWS is also required to
utilize standard administrative rulemaking processes when it makes the listing decision:
it must provide public notice of its proposed listing determination through the issuance
5
of a proposed rule, and thereafter receive public comment, followed by the
promulgation of a final rule that lists the species. 16 U.S.C § 1533(b)(5)–(6).
Notably, the ESA specifically states that, “to the maximum extent prudent and
determinable[,]” the FWS should publish a rule that designates the “critical habit” for a
listed species at the same time the agency publishes the final rule that lists the species
as endangered or threatened. Id. § 1533(a)(3)(A). In practice, the FWS often “put[s]
off” this critical habitat designation. See N.M. Cattle Growers Ass’n v. U.S. Fish &
Wildlife Serv., 248 F.3d 1277, 1283 (10th Cir. 2001) (explaining that, because the FWS
has long believed that critical habitat designations “are unhelpful, duplicative and
unnecessary[,]” the agency often fails to makes such designation “until forced to do so
by court order” (citation omitted)). However, when the FWS does undertake to engage
in the critical habitat assessment, its exercise of discretion regarding the designation of
an area as a critical habitat for a listed species is governed by a specific set of statutory
and regulatory criteria.
First, the ESA defines a “critical habitat” as:
(i) the specific areas within the geographical area occupied
by the species, at the time it is listed [as endangered or
threatened under the statute], 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; and
(ii) specific areas outside the geographical area occupied by
the species at the time it is listed . . . , upon a determination
by the Secretary that such areas are essential for the
conservation of the species.
16 U.S.C. § 1532(5)(A). Consistent with this statutory definition, in order to reach the
conclusion that a particular geographic area fulfills this definition and is thus a critical
habitat for ESA purposes, the FWS must determine the “primary constituent elements”
6
or “PCEs” of the habitat, which are “those physical and biological features that are
essential to the conservation of a given species and that may require special
management considerations or protection.” 50 C.F.R. § 424.12 (2015). In addition, as
with the decision to list a species in the first place, the agency must make the critical
habitat determination by relying on the best scientific data available. See 16 U.S.C.
§ 1533(b)(2).
However, and significantly for present purposes, in stark contrast to the ESA’s
prohibition against considering the economic impact of a listing determination, when
the FWS decides whether or not to designate a geographical area as a critical habitat for
a listed species, the agency must “tak[e] into consideration the economic impact, the
impact on national security, and any other relevant impact, of specifying any particular
area as critical habitat.” 16 U.S.C. § 1533(b)(2). Furthermore, except when extinction
is at issue, the agency has discretion both to (1) exclude any area from a critical habitat
designation based on a determination “that the benefits of such exclusion outweigh the
benefits of specifying such area as part of the critical habitat,” id., and (2) determine
the weight to be afforded to various exclusion factors when deciding the scope of a
critical habitat designation, see id.
Finally, it is important to acknowledge (as a historical matter) that the FWS has
actually employed different methodologies to assess the economic impact of a critical
habitat determination over the years. Prior to 2002, the FWS utilized the “baseline” or
“incremental” approach, which requires the agency to consider only those impacts “that
would not otherwise occur without the designation” of the critical habitat. Endangered
and Threatened Wildlife and Plants; Revisions to the Regulations for Impact Analyses
7
of Critical Habitat (“2012 Critical Habitat Revisions”), 77 Fed. Reg. 51,503, 51,506
(Aug. 24, 2012). “Under [the baseline] approach, any economic impacts of protecting
the [species] that will occur regardless of the critical habitat designation—in particular,
the burdens imposed by listing the [species in and of itself]—are treated as part of the
regulatory ‘baseline’ and are not factored into the economic analysis of the effects of
the critical habitat designation.” Ariz. Cattle Growers’ Ass’n v. Salazar, 606 F.3d 1160,
1172 (9th Cir. 2010). So, for example, the various costs that arise from the mere fact
that a species has been labeled endangered or threatened—e.g., the costs associated
with engaging in Section 7 consultations to ensure that federal actions will not likely
jeopardize the species’ continued existence, and the costs arising from compliance with
Section 9’s prohibition against “taking” the species, and the costs of complying with
state and local laws that protect the species—are considered part of the baseline and are
excluded from the calculation of costs. (Final Rule: Revised Critical Habitat for the
Riverside Fairy Shrimp (Dec. 4, 2012) (“2012 Final Rule”), Admin. R. App., ECF Nos.
7-1 & 7-2 (“AR”) 045115.) What is left are the incremental costs attributable only to
the designation of critical habitat; under the baseline methodology, only such
incremental costs are counted when the impact of the critical habitat designation is
assessed. (Cf. Econ. Analysis of Critical Habitat Designation for Riverside Fairy
Shrimp (Aug. 30, 2012) (“Econ. Analysis”), AR 050659 (“Incremental costs are limited
to administrative efforts of new and reinitiated consultations to consider adverse
modification of critical habitat . . . , administrative costs of complying with [state law],
and time delays resulting from both processes.”).)
8
Between 2002 and 2008, the FWS eschewed the baseline approach and conducted
its critical habitat economic analyses using the “co-extensive” methodology. See 2012
Critical Habitat Revisions, 77 Fed. Reg. at 51507. Pursuant to this methodology, the
FWS considered “all of the economic impacts of a critical habitat designation,
regardless of whether those impacts are attributable co-extensively to other causes.”
N.M. Cattlegrowers Ass’n, 248 F.3d at 1285. Under this approach, the aforementioned
costs of conducting Section 7 consultations, adhering to Section 9’s prohibition against
taking protected species, and complying with state laws would be included in the
calculation of the cost of the critical habitat designation, along with the additional
incremental costs that are attributable to designating the critical habitat. Thus, this
methodology is “co-extensive”—i.e., it includes costs attributable both to listing the
species as endangered or threatened and to designating its critical habitat—and this
approach will, at a minimum, equal (and will almost always exceed) the cost calculation
under the baseline approach.
In 2008, the FWS reverted back to using the baseline methodology when
conducting economic analyses with respect to the designation of critical habitats. 2012
Critical Habitat Revisions, 77 Fed. Reg. at 51506–08. The agency has apparently
continued to use that approach to date.
2. The Preparation Of Environmental Impact Statements Under
The National Environmental Policy Act
NEPA is, in essence, a “procedural statute” that is designed to ensure that federal
agencies make fully informed and well-considered decisions. New York v. Nuclear
Regulatory Comm’n, 681 F.3d 471, 476 (D.C. Cir. 2012) (quoting Vermont Yankee
Nuclear Power Corp. v. Nat’l Res. Def. Council, Inc., 435 U.S. 519, 558 (1978)
9
(internal quotation marks omitted)). To this end, before any federal agency undertakes
a “major Federal action[] significantly affecting the quality of the human environment,”
42 U.S.C. § 4332(2)(C), NEPA requires the agency to evaluate the environmental
consequences of that proposed action. The required evaluation involves preparing a
detailed environmental impact statement (“EIS”) that describes the impact of the
proposed action on the environment and any alternatives to the proposed action, which
the agency must publish for public review and comment. Id. 3 The agency may also opt
to prepare a less-detailed environmental assessment in order to assist it in determining
whether a particular agency action will have a significant effect on the human
environment such that an EIS is required—an environmental assessment is a “concise
public document” that briefly provides evidence and analysis to assist an agency in
deciding whether the action in question requires an EIS. See 40 C.F.R. § 1501.4(a)–(c);
id. § 1508.9 (defining an environmental assessment). Based on the information
contained in the assessment, the agency may proceed to prepare an EIS; alternatively,
the agency may conclude that an EIS is not warranted. 40 C.F.R. § 1501.4(e).
The NEPA statute does not contain a private right of action against the
government; rather, a plaintiff alleging a NEPA violation “must rest its claim for
judicial review on the Administrative Procedure Act.” Public Citizen v. U.S. Trade
Representative, 5 F.3d 549, 551 (D.C. Cir. 1993). In the context of such actions, the
3
An EIS details both the adverse environmental consequences of the proposed project and alternatives
to the project, and it also address the extent to which the project’s adverse effects can be mitigated. 42
U.S.C. § 4332(2)(C)(i)–(iii). An agency’s preparation of an EIS is an extensive undertaking, insofar as
it generally involves both a draft and a final document. The agency must invite comments on the draft
statement before preparing the final EIS, see 40 C.F.R. § 1502.9 (2015); 40 C.F.R. § 1503.1, and it
must consult with other federal agencies that may have special expertise with respect to the
environmental effects of the project, among other things, see 42 U.S.C. § 4332(2)(C).
10
FWS has taken the position that “outside the jurisdiction of the U.S. Court of Appeals
for the Tenth Circuit, we do not need to prepare environmental analyses as defined by
NEPA in connection with designating critical habitat under the Act.” (2012 Final Rule,
AR 045141 (citing Douglas Cty. v. Babbitt, 48 F.3d 1495 (9th Cir. 1994)).) 4
B. Background Facts Underlying Otay Mesa’s Complaint
1. Riverside Fairy Shrimp
The Riverside fairy shrimp is a small freshwater crustacean—generally
measuring 0.56 to 0.92 inches long—that was identified as a new species in 1985 and
listed as “endangered” on August 3, 1993. (See Final Rule: Determination of
Endangered Status for Three Vernal Pool Plants and the Riverside Fairy Shrimp (Aug.
3, 1993) (“Listing Decision”), AR 000695; Proposed Rule: Revised Critical Habitat for
the Riverside Fairy Shrimp (June 1, 2011) (“2011 Proposed Rule”), AR 055615.) This
shrimp is a filter feeder; its diet consists mostly of algae, bacteria, and other
microorganisms. (2012 Final Rule, AR 045094.) Moreover, Riverside fairy shrimp
“are relatively sedentary[,]” and the species typically does not actively migrate. (Id.
045098.) 5
Notably, in order to grow and reproduce, Riverside fairy shrimp rely upon
“vernal pool” hydrology—i.e., pools that fill with water during fall and winter rains and
4
This geographically-based distinction in agency policy has resulted from a split in the U.S. Courts of
Appeals on the question of whether an EIS is required for critical habitat designations. In Catron
County, the Tenth Circuit Court of Appeals held that the FWS must comply with NEPA when
designating critical habitat under the ESA. 75 F.3d at 1436. By contrast, the Ninth Circuit, in Douglas
County v. Babbit, 48 F.3d 1495 (9th Cir. 1995), held that FWS does not have to comply with NEPA
when designating critical habitat. Id. at 1502–07.
5
Passive relocation of these shrimp can occur as the result of weather conditions such as rain or wind,
or when animals or vehicle tires pick up and transport mud that contains Riverside fairy shrimp egg cysts.
(2012 Final Rule, AR 045094–95) The cysts can also survive passage through the digestive tracts of
animals, which provides for another means of movement. (Id. 045139.)
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evaporate in the spring. (Id. 045092–94.) Generally speaking, this species of shrimp
mates and reproduces when the vernal pool is full, and the offspring lay dormant—
encased in hard cysts at the bottom of the pool—when the pool is dry. The lifecycle of
a Riverside fairy shrimp begins when a vernal pool fills with water and the shrimp
mature, mate, and reproduce. The female shrimp carry the fertilized eggs in a pouch,
but before the embryos reach full maturity, they stop developing and enter a dormant
state. (Id. 045094.) A hard protective coating develops, and the embryos turn into
cysts that eventually fall to the bottom of the vernal pool. (Id.)
“By the time the pool dries out, the numbers of dormant cysts within each pool
basin can reach tens of thousands to millions, depending on pool size, volume, and
depth[.]” (Final Rule: Designation of Critical Habitat for the Riverside Fairy Shrimp
(2005) (“2005 Final Rule”), AR 019548.) The protective coating that forms around the
cysts allows the cysts to remain dormant at the bottom of a dried-out vernal pool for
decades, and possibly even centuries, and protects the shrimp through extreme weather
conditions. (Id. 019549.) When conditions are favorable and the vernal pool fills, a
portion of the dormant cysts at the bottom of the pool will hatch. (Id. 019550.) But
once the pool dries out again, many more cysts remain dormant in the soil and may
hatch during a future filling. (See id.)
2. Vernal Pool Networks And Watersheds
Only vernal pools with certain characteristics provide an appropriate habitat for
survival of the Riverside fairy shrimp. For example, “Riverside fairy shrimp will not
hatch in pools that receive cool waters from early winter rains”; rather, they exist only
in pools that “retain water through the warmer weather of late spring[.]” (Listing
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Decision, AR 000699 (citations omitted).) Moreover, because it takes the cysts
approximately eight weeks to hatch, mature, and reproduce in the water of the pool (see
2012 Final Rule, AR 045094), the pool conditions much be such that the pool will not
dry out completely in less than eight weeks. This means that the habitat of this species
is limited to vernal pools that are at least moderately deep and thus take longer to
evaporate. (Id.) In addition, the vernal pools that comprise the Riverside fairy shrimp
habitat must have “nearly impermeable surface or subsurface soil layers and flat or
gently sloping topography” (Final Rule: Final Designation of Critical Habitat for the
Riverside Fairy Shrimp (May 30, 2001) (“2001 Final Rule”), AR 053047), because hard
soil layers prevent water from seeping when the pond fills. (Id. (explaining that “[i]n
southern California, these impervious layers are typically alluvial materials with clay or
clay loam subsoils, and they often form a distinctive micro-relief known as Gilgai or
mima mound topography”).)
As a general matter, vernal pools that have the necessary physical characteristics
to support Riverside fairy shrimp are those that fill with water during fall and winter
rains, that evaporate in the spring (2012 Final Rule, AR 045093), and that typically
occur in pool complexes—that is, “two or more vernal pools in the context of a larger
vernal pool watershed[,]” where the pools are connected by flowing water either on or
below the surface. (Id.) 6 Vernal pool complexes and their associated watersheds are
often located “in areas with Mediterranean climates where slight depressions become
seasonally wet or inundated following fall or winter rains.” (Listing Decision, AR
000695.) Most of the vernal pool habitats in Southern California have been lost over
6
The term “watershed” refers to the area upland of and adjacent to a vernal pool. (Listing Decision,
AR 000700.)
13
time due to a variety of factors including commercial growth, and only “a very small
percentage remain from the U.S./Mexico borderlands north, and those that remain are
found in a disturbed and artificially fragmented landscape.” (Bauder & McMillan—
Current Distribution and Historical Extent of Vernal Pools in Southern California and
Northern Baja California, Mexico (1998), AR 046148; see also Environmental
Assessment & Land Protection Plan: Vernal Pools Stewardship Project, AR 000002
(“Due to historical and ongoing agricultural activities, 78 percent of the vernal pools
once located on [the southernmost mesa of California] have been lost” (citation
omitted)); Vernal Pools of Southern California Recovery Plan–Bauder (Sep. 3, 1998),
AR 052857 (“On much of the coastal terrace, habitat losses have resulted in a severe
reduction of the geographic range of pools and the species found in them. These losses,
coupled with fragmentation of the habitat, have accentuated the naturally patchy,
discontinuous distribution patterns of most vernal pool species.”).)
3. Subunit 5c
Otay Mesa owns land in San Diego County, California, including the 57 acres
that the FWS has designated as critical habitat for the Riverside fairy shrimp and which
is referred to throughout this Opinion as “Subunit 5c” or “the Property.” Otay Mesa
plans to develop a part of Subunit 5c into a recycling center and landfill, which it
claims is essential to address projected landfill capacity issues in San Diego County.
(See Otay Mesa Comments to Proposed Rule to Revise the Critical Habitat
Determination for the Riverside Fairy Shrimp and Notice of Draft Economic Analysis
(April 2, 2012) (“Otay Mesa Comments”), AR 037643, 037649. Otay Mesa claims that
the “land underlying Subunit 5C is zoned as a landfill, and the area surrounding the
western boundary of the project has been designated as a landfill buffer zone, allowing
14
only uses consistent with the future recycling center and landfill operations.” (Id.
037648.) Otay Mesa also asserts that “this facility could take more than 10 years to
permit and construct” due to the number of agencies with which it must consult and the
nature of the approvals that it must obtain. (Id. 037649 (explaining in its comment
letter on the proposed rule that the planned recycling facility “will need environmental
review as well as permits from the Army Corps of Engineers, [the] FWS, the California
Department of Fish and Game, the State Water Resources Control Board, the Regional
Water Quality Control Board, and the California Integrated Waste Management
Board[,]” and that “all sensitive species and habitat impacted by the Project will be
mitigated in accordance with requirements imposed by the FWS as part of the Section 7
consultation”).)
Subunit 5c contains at least one vernal pool, which is approximately one acre in
size—the pool was formerly a cattle stock pond. (2012 Final Rule, AR 045109.)
According to the FWS, Subunit 5c “also contains a small stream as well as the
downward slope and mima mound topography that make up the watershed associated
with the [] vernal pool.” (Id.)
In designating Subunit 5c as a critical habitat for the Riverside fairy shrimp, the
FWS relied on three environmental surveys that contractors performed on this pool: one
in 2000 (Large Branchiopod Dry Survey at Otay Mesa, Generating Project (Jun. 19,
2000) (“2000 Survey”), AR 003806–11), one in 2001 (Wet Season Survey Report for
RFS at East Otay Mesa SPA (Sep. 19, 2001) (“2001 Survey”), AR 004784–817), and
one in 2011 (Survey Report for Fairy Shrimp at Proposed East Otay Mesa Landfill
Project (Dec. 23, 2011) (“2011 Survey”), AR 037261–76). During the 2000 survey,
15
which was conducted when the stock pond was dry, the contractor gathered 10 soil
samples from the dried-out pond bed, each of which contained Riverside fairy shrimp
cysts. (2000 Survey, AR 003807–08.) The next survey began on January 23, 2001,
when the stock pond was inundated with water, and ended on May 16, 2001, after the
pond had dried out. “[O]n February 7, 2001, unidentified larval fairy shrimp thought to
be Riverside fairy shrimp . . . were observed” in the stock pond. (2001 Survey, AR
004788, 004792.) “Later, during the March 15, 2001 sampling session, adult Riverside
fairy shrimp were positively identified” in the stock pond, numbering in the tens of
thousands. (Id. 004788, 004795.) During the 2011 survey, which was conducted when
the stock pond was dry, the contractor again gathered 10 soil samples. Each of these
samples contained Riverside fairy shrimp cysts, in numbers “ranging from over 25 to
more than 100 cysts per soil sample.” (2011 Survey, AR 037261, 37263.) There is no
dispute that the stock pond itself is the only location within Subunit 5c where cysts
and/or shrimp have been found.
C. The Critical Habit Rulemaking Proceedings For The Riverside Fairy
Shrimp
1. Prior Rulemaking Proceedings
The FWS did not designate any critical habitat for the Riverside fairy shrimp
when it listed the species as endangered in 1993, despite its statutory obligation to do
so. Instead, the agency published its first rule designating a critical habitat for the
Riverside fairy shrimp on May 30, 2001. (2001 Final Rule, AR 53046–77.) Several
construction industry groups filed a lawsuit to challenge this rule in federal court, see
Bldg. Indus. Legal Def. Found. v. Norton, 231 F. Supp. 2d 100, 102 (D.D.C. 2002),
which led to a settlement agreement pursuant to which the FWS published a revised
16
critical habitat designation for the Riverside fairy shrimp in March of 2005. (2005
Final Rule, AR 019536–757.)
In 2005, the FWS made specific findings that Subunit 5c contained the necessary
primary constituent elements (“PCEs”) to meet the statutory definition of critical
habitat for the Riverside fairy shrimp. (See 2005 Final Rule, AR 019625.) However,
the agency exercised its discretion to exclude Subunit 5c from the ultimate critical
habitat designation, finding that the benefits of exclusion exceeded the benefits of
inclusion. (Id. 019711–14.) Specifically, the Secretary employed the co-extensive
methodology to evaluate the economic impact of the critical habitat designation and
found that inclusion of Subunit 5c would result in minimal benefits to the species
because the Riverside fairy shrimp currently occupied Subunit 5c, and therefore, anyone
who proposed to engage in an activity that “might adversely impact the species,
including possibly significant habitat modification[,]” would already be required to
consult with the FWS, even without a critical habitat designation. (Id. 019711; see also
id. 019712 (“[W]e believe that this proposed unit as critical habitat would provide little
additional Federal regulatory benefits for the species.”).) With respect to the benefits
of exclusion, the Secretary found “that the costs associated with designating Subunit 5c
as critical habitat would range from $5 million to $31 million, largely as loss of land
value and increased costs to private landowners[,]” (id. 019712–13,) and thus were
relatively high, leading to the conclusion that the costs outweighed the benefits and, as
a result, Subunit 5c should be excluded.
Taking into account all of the exclusions, the FWS’s 2005 rule ultimately
designated approximately 306 acres as critical habitat for the Riverside fairy shrimp.
17
(Id. at 019536.) The 2005 rule was challenged in court, see Ctr. for Bio. Diversity v.
Salazar, No. 3:09-cv-0051 (JM) (JMA) (S.D. Cal. 2009), which led to another
settlement agreement, pursuant to which the FWS conducted the rulemaking
proceedings that are the subject of the instant lawsuit. (2012 Final Rule, AR 045087.)
2. The 2011-2012 Rulemaking Proceedings
a. The 2011 Proposed Rule
On June 1, 2011, the FWS published in the Federal Register its revised proposed
designation of critical habitat for the Riverside fairy shrimp (the “2011 Proposed
Rule”). The 2011 Proposed Rule detailed the process that the FWS undertook in order
to identify the critical habitat for the species. (2011 Proposed Rule, AR 055614–75.)
As an initial matter, the FWS explained that the areas the Riverside fairy shrimp
occupied in 1993, when the species was listed as endangered, included “Orange,
Riverside, and San Diego Counties, as well as Baja, Mexico”—where there were
documented sightings in 1993—as well as certain “additional areas [that] were occupied
at the time of listing but were not identified at the time of listing.” (Id. 055626). The
FWS then identified three PCEs of a Riverside fairy shrimp habitat—these “physical
and biological features essential to the conservation of the Riverside fairy shrimp” (id.
055623, 055628) were specified as follows: first, a vernal pool wetland, with pools that
have suitable chemistry, that are filled 2 to 8 months during the winter and spring
(though not necessarily every year), and that dry out in late spring or summer; second,
adjacent areas that function as the local watershed, which may range in size from a few
acres to more than 100 acres and which facilitate the filling of the pools in the winter
and spring; and third, underlying soils that have an impermeable layer such that the
pool can fill during the winter and spring months. (See id. 055623; see also id. 055645
18
(“Subunit 5c contains the physical and biological features that are essential to the
conservation of Riverside fairy shrimp, including ephemeral wetland habitat (PCE 1),
intermixed wetland and upland habitats that act as the local watershed (PCE 2), and the
topography and soils that support ponding during winter and spring months (PCE 3).”)
The next step that the FWS undertook was to “compile[] all available
observational data on Riverside fairy shrimp into a GIS database” in order to ensure
that it had an accurate map of all instances where the species was observed or collected.
(Id. 055628.) Using this information and the known characteristics of the species, the
agency evaluated “which occurrences were extant at the time of listing based on the
listing rule as well as information that has become available since listing[,]” and it
ultimately concluded that all areas, except for one that is not at issue in this case, “were
occupied prior to the time the species was listed.” (Id. 055628–29; see also id. 055618
(“We believe occurrences documented since the 1993 listing do not represent an
expansion of the species’ distribution and range into previously unoccupied areas (with
the exception of Johnson Ranch Created Pools), but rather a better understanding of the
historical distribution and range of the species[.]”).) The FWS then purportedly
reviewed these maps and removed all of the geographic areas that did not contain the
PCEs it had identified and, subsequently, further refined those maps based on relevant
scientific information and statutory requirements. (See id. 055629.) 7
7
In the proposed rule, the FWS describes its map-development process this way:
We first mapped the ephemeral wetland habitat in the occupied area using
occurrence data, aerial imagery, and 1:24,000 topographic maps. We then
mapped the intermixed wetland and upland habitats that function as the local
watersheds and the topography and soils that support the occupied ephemeral
wetland habitat. We mapped these areas to identify the gently sloping area
associated with ephemeral wetland habitat and any adjacent areas that slope
19
As a result of this analysis, the FWS “propose[d] to designate 2,984 ac[res] . . .
in 5 units, containing 25 subunits, as critical habitat for the Riverside fairy shrimp.”
(Id. 055635.) In making this designation, the FWS specifically determined that Subunit
5c—the one-acre stock pond and 56 surrounding acres that the FWS characterizes as
watershed for the stock pond—is essential to the conservation of the species and
requires special management considerations and protections. (See id. 055645 (stating,
among other things, that “[t]his subunit is considered essential for the recovery of
Riverside fairy shrimp because it includes one or more pools essential to maintain
habitat function, genetic diversity, and species viability” and that “this subunit may
require special management considerations or protection to address threats from
nonnative plant species and anthropogenic activities (e.g., development, OHV use,
water run-off, and grazing)” (internal citation omitted).) Consequently, the FWS
proposed to include Subunit 5c in the final critical habitat designation, and sought
comments regarding this proposal, especially “[s]pecific information regarding the
presence or absence of the physical and biological features essential to the conservation
of the species within proposed Subunit 5c, and whether this area is essential to the
conservation of the species and why[.]” (Id. 055614.) 8
directly into the ephemeral wetland habitat, which contribute to the hydrology of
the ephemeral wetland habitat. We delineated the border of the proposed revised
critical habitat around the occupied ephemeral wetlands and associated local
watershed areas to follow natural breaks in the terrain such as ridgelines, mesa
edges, and steep canyon slopes.
(2011 Proposed Rule, AR 055629.)
8
With respect to the other parcels of land that the FWS proposed to designate as critical habitat for the
Riverside fairy shrimp, the FWS proposed to exclude under 16 U.S.C.§ 1533(a)(3)(A) certain military-
owned land that is covered by an approved integrated natural resource management plan. It further
proposed to exclude under 16 U.S.C. § 1533(b)(2) several additional areas, including areas that were
subject to finalized or draft “habitat conservation plans” under Section 10 of the ESA. Subunit 5c is
20
At least two peer reviewers commented on the 2011 Proposed Rule, both of
whom agreed with the FWS’s approach of including the watershed area in the critical
habitat designation for the Riverside fairy shrimp. (See Marie A. Simovich, Peer
Review of the Proposed Revised Critical Habitat for the Riverside Fairy Shrimp (July
22, 2011) (“Simovich Comment”), AR 031959 (“It is good that you are considering the
watershed critical, especially for a species needing lasting pools.”); Ellen Bauder, Peer
Review Response to Proposed Revised Critical Habitat for Riverside Fairy Shrimp
(“Bauder Peer Review”), AR 032302 (“I was pleased to see a discussion—in both
documents—of the importance and complexity of watersheds and their relevance to the
designation of critical habitat in vernal pool ecosystems.”).) One of these reviewers
went on to explain how alteration of the watershed area surrounding vernal pools would
negatively affect Riverside fairy shrimp:
[The species] is sensitive both to the length of the ponding
period and to water chemistry. Since this species requires
longer periods of ponding to hatch and mature, it is found in
ponds that are usually the deepest in a complex, and if in a
network, at the bottom of the network. Loss of shallower
headwater and flow through pools higher up in the network,
as well as loss of upland habitat within the watershed, alters
both the surface and subsurface flow paths. This would
impact the rate of movement of water, the storage of water
(location and length of time), and water chemistry.
(Bauder Peer Review, AR 032302 (internal citations omitted).) However, this same
reviewer was not able to verify whether the maps that the FWS had provided properly
captured vernal pool networks and watersheds because the maps did not contain
“topographical lines and precise pool locations[.]” (Id.)
not the subject of any such plan, and the FWS did not propose to exclude it for economic reasons under
16 U.S.C. § 1533(b)(2), as it had done in 2005. (2011 Proposed Rule, AR 055621.)
21
The FWS did not publish an economic analysis of the impact of the critical
habitat designation contemporaneously with the 2011 Proposed Rule. Rather, the
agency indicated that it was preparing a new economic analysis on which it would seek
public comment and review. (2011 Proposed Rule, AR 055651.) Moreover, in the 2011
Proposed Rule, the FWS placed the public on notice that, instead of employing the co-
extensive analysis that the agency had used to evaluate the critical habitat designation
for the Riverside fairy shrimp in 2005, the new economic analysis would “focus on the
specific costs attributable to designating the areas proposed in this proposed rule as
critical habitat” under the baseline approach. (Id.) In the interim, the FWS sought
“[i]nformation on any quantifiable economic costs or benefits of the proposed revised
designation of critical habitat.” (Id. 055614–15.)
b. The 2012 Proposed Rule And Economic Analysis
On March 1, 2012, the FWS published an amended version of the 2011 Proposed
Rule—hereinafter referred to as the “2012 Proposed Rule”—in order “to clarify that
certain subunits that we originally proposed for revised critical habitat designation [as
occupied areas], are now also being proposed [as unoccupied areas.]” (Proposed Rule:
Revised Critical Habitat for Riverside Fairy Shrimp, 77 Fed. Reg. 12,543 (March 1,
2012) (“2012 Proposed Rule”), AR 037610.) Subunit 5c is one of these re-designated
units. (Id. 037613.) 9 The FWS explained that it had made this change because it had
only “limited surveys verifying occupancy of many specific pools prior to listing”;
therefore, an “occupied”-only designation of critical habitat might be vulnerable to
9
In articulating alternative bases for its designation decision, the FWS did not change the total number
of acres (2984) that it proposed to designate as critical habitat. (See 2012 Proposed Rule, AR 037610;
2011 Proposed Rule, AR 055614.)
22
challenge based on the statutory requirement that the FWS must determine occupation
status as of the time the species was listed. (Id. 037612.) See also 16 U.S.C
§ 1532(5)(A)(i). The 2012 Proposed Rule also reaffirmed that the FWS had abandoned
the co-extensive economic analysis in favor of a baseline analysis of the critical habitat
designation, which, as explained above, limits consideration of economic impacts to
those “stemming solely from the critical habitat rulemaking.” (Id. 037617.)
With respect to Subunit 5c in particular, the FWS found that Subunit 5c was
“occupied” at the time of listing for the purpose of the ESA, based on survey results
dating as early as 2000, as well as the presence of the PCEs on the property at the time
of listing. (Id. 037615.) 10 Alternatively, the FWS found that, even if Subunit 5c was
“unoccupied” at the time of listing, it is now occupied and essential for the conservation
of Riverside fairy shrimp because the area contains the requisite “physical and
biological features” necessary to ensure the conservation of the species. (Id.)
The FWS also hired a contractor, Industrial Economics, Inc., to produce the
statutorily required economic analysis of the proposed critical habitat designation (“the
2012 Proposed Rule Economic Analysis”). Industrial Economics released a draft
version of the economic analysis on March 14, 2012, and a final version on August 30,
2012. (See Indus. Econ., Inc., Economic Analysis of Critical Habitat Designation for
Riverside Fairy Shrimp (2012) (“2012 Proposed Rule Econ. Analysis”), AR 050651–
771.) The 2012 Proposed Rule Economic Analysis utilized the baseline methodology
and, thus, sought to quantify the “incremental impacts of this rulemaking[,]”—i.e., the
10
In the context of critical habitat designation, “presence” and “occupation” are not synonymous.
Rather, “presence” indicates where the species is physically found (the one-acre stock pond in this
case), while “occupation” encompasses both those areas where the species is physically found and those
areas necessary to support the species (the watershed in this case). (Defs.’ Mem. at 23.)
23
“administrative efforts of new and reinitiated consultations to consider adverse
modification of critical habitat for Riverside fairy shrimp, administrative costs of
complying with the California Environmental Quality Act (CEQA), and time delays
resulting from both processes.” (See id. 050659, 050680). The analysis acknowledged
that “[a]lthough minimal economic activity on private lands is anticipated, of the
impacts quantified, the greatest impacts are expected to be concentrated in Units 2 and
5 within Orange and San Diego Counties, respectively[,]” (id. 050660), and that
Subunit 5c is one of three that would shoulder most of the incremental costs associated
with the proposed critical habitat designation (id. 050719).
In modeling the projected costs associated with the critical habitat designation,
the 2012 Proposed Rule Economic Analysis generally “relie[d] on local planning
authorities for estimates of the number of housing units projected to be built by 2035 in
the census tracts encompassing the study area[,]” and, using this data, quantified the
incremental impacts on that projected residential development. (See id. 050704–06.) In
addition to this residential projection, the analysis also mentioned Otay Mesa’s specific
plans to build a landfill and recycling center on the Property, and found that the
proposed designation was unlikely to impose any incremental costs on the construction
of such a facility. (See id. 050719 n.94 (pointing out that “plans are currently in place
to develop the East Otay Mesa Recycling Collection Center and Landfill project in
vicinity of Subunit 5C[,]” but “[b]ecause this subunit is known to be occupied by the
Riverside fairy shrimp, if a consultation were to occur, the Service would evaluate the
effects of the Project on individuals in the pool, regardless of the presence of critical
habitat”). As a result, the analysis concluded that “the low and high-end ranges of
24
incremental effects of all economic activities in proposed revised critical habitat are
estimated to be $1.77 million to $2.85 million[.]” (Id. 050659.) 11
c. Otay Mesa’s Comments On The 2012 Proposed Rule
And Economic Analysis
On April 2, 2012, Otay Mesa submitted comments to the FWS regarding the
2012 Proposed Rule and the Economic Analysis, asserting its position that Subunit 5c
does not meet the statutory and regulatory requirements for inclusion in the critical
habitat designation for the Riverside fairy shrimp, and, alternatively, explaining why
Subunit 5c should be excluded from the final critical habitat designation under 16
U.S.C. § 1533(b)(2). (Otay Mesa Comments, AR 037643–58.) Otay Mesa argued that
designating Subunit 5c as “occupied” critical habitat is inappropriate because “[t]here is
no evidence that Riverside fairy shrimp were present on Subunit 5C in 1993, when the
species was listed as endangered.” (Id. 037644.) Moreover, Otay Mesa asserted that
“in the 19 years since the Riverside fairy shrimp was listed, only a handful of Riverside
fairy shrimp have been found[]” and that “this stock pond normally is only wet for 2–3
weeks per year[,]” which is an insufficient period of time for the shrimp to mature and
reproduce. (Id. 037646.) Otay Mesa likewise argued that designating Subunit 5c as
“unoccupied” critical habitat would be improper because the property does not “possess
the physical and biological characteristics necessary for success of the species” in that
the one-acre stock pond is an “isolated pool” and the remaining 56 acres contain neither
vernal pools nor shrimp. (Id. 037646–47.)
11
Approximately 90% of these costs were attributed to “time delays to development activities; the
remaining portion results from administrative costs of considering adverse modification in section 7
consultations, and conducting environmental assessments to comply with [applicable state
regulations].” (2012 Proposed Rule Econ. Analysis, AR 050659–60.) For the entirety of Unit 5, the
projected costs ranged from $431,670-$1,032,600. (Id. 050661.)
25
Assuming arguendo that Subunit 5c does, in fact, meet the statutory criteria for
designation as a critical habitat, Otay Mesa also mentioned that the Secretary of the
Interior should exercise the discretion afforded to him under § 1533(b)(2) to exclude
areas that would otherwise be designated as critical habitat because the benefits of
exclusion outweigh the benefits of inclusion in light of the recycling center and landfill
it proposed to build on the Property. (See id. 037647–48.) In this regard, Otay Mesa
argued that “the Riverside fairy shrimp will not become extinct if Subunit 5C is
excluded, because any potential habitat on the property is poor, and characterized as
being heavily disturbed—there is only one artificial stock pond that could support the
species, and it is not connected to any vernal pool complex.” (Id. 037648.) Moreover,
Otay Mesa asserted that landfills in the San Diego area are close to reaching their
capacity threshold, creating a “critical need” for the proposed facility, and that “[d]elay
is not an option, because this facility could take more than l0 years to permit and
construct.” (Id. 037649; see also id. (asserting further that “[i]dentifying appropriate
land as a landfill site can be extremely challenging, so impairing land that has already
been zoned for this use would be a loss for San Diego County”).)
The final argument in Otay Mesa’s comment letter with respect to the proposed
designation was that, because the FWS did not prepare an environmental impact
statement in compliance with NEPA, any final designation of critical habitat would be
arbitrary and capricious. (Id. 037650.) Otay Mesa also challenged the validity of the
Economic Analysis on a number of grounds, including the agency’s decision to use the
baseline methodology rather than the co-extensive methodology, and the contractor’s
26
use of model inputs that assumed that residential development would occur on Subunit
5c, despite its exclusive zoning for landfill use. (Id. 037653–58.)
d. The 2012 Final Rule
On December 4, 2012, the FWS published a final rule designating 1,724 acres as
critical habitat for the Riverside fairy shrimp (the “2012 Final Rule”). (2012 Final Rule,
AR 045086–157.) This final rule, which is the subject of this litigation, underscored
the FWS’s oft-stated belief that the critical habitat of the Riverside fairy shrimp
includes upland watershed areas for vernal pools. Specifically, the FWS stated that
“[t]o maintain high-quality vernal pool ecosystems, the vernal pool basin (a specific
vernal pool and surrounding landscape) or complex and its upslope watershed (adjacent
vegetation and upland habitat) must be available and functional.” (See id. 045093
(internal citation omitted).) The agency further explained that “[a]djacent upland
habitat supplies important hydrological inputs to sustain vernal pool ecosystems[,]” and
that “[p]rotection of the upland habitat between vernal pools within the watershed is
essential to maintain the space needs of Riverside fairy shrimp and to buffer the vernal
pools from edge effects.” (Id.) The FWS also described the process that it had used to
map and define the critical habitat, and restated its conclusion that preservation of
Subunit 5c, in particular, is necessary for the conservation of the species
because its occupied pool and surrounding watershed are
essential to maintain habitat function, genetic diversity, and
species viability. Further, it is essential because the basin
contains the appropriate depth and ponding duration, soils,
elevation, and water chemistry (pH, temperature, salinity,
etc.) to fulfill Riverside fairy shrimp’s life-history needs.
The vernal pool in this subunit has been impacted by OHV
use, cattle grazing, development, and nonnative grasses.
Subunit 5c contains the physical or biological features
essential to the conservation of Riverside fairy shrimp,
including ephemeral wetland habitat (PCE 1), intermixed
27
wetland and upland habitats that act as the local watershed
(PCE 2), and topography and soils that support ponding
during winter and spring months (PCE 3).
(Id. 045109 (internal citation omitted).)
Although the FWS acknowledged that it “lack[ed] specific documentation of
Riverside fairy shrimp occupancy in Subunit 5c at the time of listing” (id.), its
conclusion that Subunit 5c was “occupied” at the time the Riverside fairy shrimp was
listed as endangered was based on the physical and biological features of the property,
the sedentary nature of the shrimp, and the fact that shrimp have been observed in
Subunit 5c’s vernal pool relatively recently. (Id.; see also id. 045138–39 (responding
to Otay Mesa’s comment regarding the lack of surveys showing that Subunit 5c was
occupied at the time of listing).) 12 Alternatively, the FWS found that Subunit 5c met
the criteria for designation as “unoccupied” critical habitat “because we consider the
subunit to be essential for the conservation of Riverside fairy shrimp, regardless of
occupancy data at the time of listing.” (Id. 045109.) In response to the reviewer’s
comment about the inability to verify the scope of the area that purportedly constitutes
the vernal pool watershed, the FWS explained that “[t]he printing standards of the
Federal Register are not compatible with topographical maps or other detailed features
that would show vernal pool networks and watersheds. However, the GIS files we used
to delineate critical habitat are available by request from the Carlsbad Fish and Wildlife
Office[,]” and “[t]he shapefiles can be laid over other layers (aerial photography, roads)
for users to view the vernal pool networks and watersheds”). In the Final Rule, the
12
At the hearing this Court held on the parties’ cross-motions, counsel for Otay Mesa appeared to
waive this particular occupancy argument, stating that Otay Mesa was “not pressing with the Court” the
question of whether the stock pond was occupied at the time of listing. (June 26, 2014 Hr’g Tr. at
17:14.)
28
FWS also provided responses to each point that Otay Mesa had raised in its comment
letter. (Id. 045138–43.)
Otay Mesa timely filed a complaint challenging the 2012 Final Rule, and the
parties’ cross motions for summary judgment regarding the validity of the rule are ripe
for review.
II. LEGAL STANDARDS
A. Summary Judgment
In general, a court will grant summary judgment “if the movant shows that there
is no genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
247 (1986); Moore v. Hartman, 571 F.3d 62, 66 (D.C. Cir. 2009). “Summary judgment
is the proper mechanism for deciding, as a matter of law, whether an agency action is
supported by the administrative record and consistent with the APA standard of
review.” Loma Linda Univ. Med. Ctr. v. Sebelius, 684 F. Supp. 2d 42, 52 (D.D.C.
2010) (citing Stuttering Found. of Am. v. Springer, 498 F. Supp. 2d 203, 207 (D.D.C.
2007)); see also Richards v. INS, 554 F.2d 1173, 1177 & n.28 (D.C. Cir. 1977).
However, due to the limited role that a court plays in reviewing the administrative
record, the typical summary judgment standards set forth in Rule 56(c) are not
applicable. Stuttering, 498 F. Supp. 2d at 207. Rather, “[u]nder the APA, it is the role
of the agency to resolve factual issues to arrive at a decision that is supported by the
administrative record, whereas ‘the function of the district court is to determine whether
or not as a matter of law the evidence in the administrative record permitted the agency
to make the decision it did.’” Id. (quoting Occidental Eng’g Co. v. INS, 753 F.2d 766,
769 (9th Cir. 1985)). In other words, “when a party seeks review of agency action
29
under the APA, the district judge sits as an appellate tribunal[,]” and “[t]he ‘entire case’
on review is a question of law.” Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077, 1083
(D.C. Cir. 2001) (footnote and citations omitted).
B. The Administrative Procedure Act
As noted above, Otay Mesa has brought this action under the Administrative
Procedure Act alleging that the FWS’s implementation of the 2012 Final Rule is
“arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with
law[.]” 5 U.S.C. § 706(2)(A). In reviewing agency action under the APA, a court must
be mindful of the division of labor between the court and the agency, remembering that
“it is the role of the agency to resolve factual issues to arrive at a decision that is
supported by the administrative record, whereas the function of the district court is to
determine whether or not as a matter of law the evidence in the administrative record
permitted the agency to make the decision it did.” Hi-Tech Pharmacal Co. v. FDA, 587
F. Supp. 2d 13, 18 (D.D.C. 2008) (internal quotation marks and citation omitted).
Accordingly, a reviewing court cannot “substitute its judgment for that of the agency.”
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).
Moreover, given that “[t]he scope of review under the ‘arbitrary and capricious’
standard is narrow[,]” id. at 43, the agency action under review is “entitled to a
presumption of regularity[,]” see Citizens to Preserve Overton Park, Inc. v. Volpe, 401
U.S. 402, 415 (1971), overruled on other grounds, Califano v. Sanders, 430 U.S. 99
(1977). Accordingly, a court’s role in reviewing agency action is limited to
determining “whether the [agency’s] decision was based on a consideration of the
relevant factors and whether there was a clear error of judgment.” State Farm, 463 U.S.
at 31–32. In particular, a reviewing court must evaluate whether the agency considered
30
relevant data and articulated an explanation that establishes a “rational connection
between the facts found and the choice made.” Id. at 43.
Notably, if the agency has acted in an area where there is scientific and
technological uncertainty, courts “must proceed with particular caution, avoiding all
temptation to direct the agency in a choice between rational alternatives.” Alliance for
Bio-Integrity v. Shalala, 116 F. Supp. 2d 166, 177 (D.D.C. 2000). This is because,
where a matter involves scientific or technical decisions within the agency’s area of
expertise, a reviewing court must afford the agency a “high level of deference.” Serono
Labs., Inc. v. Shalala, 158 F.3d 1313, 1320 (D.C. Cir. 1998) (quotation marks and
citation omitted). Moreover, “[w]hen specialists express conflicting views, an agency
must have discretion to rely on the reasonable opinions of its own qualified experts
even if, as an original matter, a court might find contrary views more persuasive.”
Marsh v. Or. Natural Res. Council, 490 U.S. 360, 378 (1989).
To the extent that Otay Mesa’s APA claim involves questions of statutory
interpretation, this Court must utilize the two-step process laid out in Chevron U.S.A.
Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 (1984). The
Chevron analysis first requires the reviewing court to determine “whether Congress has
directly spoken to the precise question at issue.” Chevron, 467 U.S. at 842. To resolve
whether “the intent of Congress is clear” under this first step, id., the court must
exhaust the “traditional tools of statutory construction,” including textual analysis,
structural analysis, and (when appropriate) legislative history, id. at 843 n.9; Bell Atl.
Tel. Cos. v. FCC, 131 F.3d 1044, 1047 (D.C. Cir. 1997). “If the intent of Congress is
clear, that is the end of the matter; for the court, as well as the agency, must give effect
31
to the unambiguously expressed intent of Congress.” Chevron, 467 U.S. at 842–43.
However, if the Court concludes that the statute is silent or ambiguous on the specific
issue after employing these tools, the Court moves on to step two and defers to the
agency’s interpretation, so long as it is based on a permissible construction of the
statute. See id. at 843. Put another way, if Congress is silent, the Court must defer to
the agency’s construction “unless it is arbitrary or capricious in substance, or
manifestly contrary to the statute.” Mayo Found. for Med. Educ. & Research v. United
States, 562 U.S. 44, 53 (2011) (citations and internal quotation marks omitted). Indeed,
“the whole point of Chevron is to leave the discretion provided by the ambiguities of a
statute with the implementing agency.” Ass’n of Private Sector Colls. & Univs. v.
Duncan, 681 F.3d 427, 441 (D.C. Cir. 2012) (citations and internal quotation marks
omitted).
III. ANALYSIS
Otay Mesa maintains that it is entitled to summary judgment because the record
establishes that the FWS’s final rule designating Subunit 5c as a critical habitat for the
Riverside fairy shrimp is arbitrary and capricious in three respects. First, Otay Mesa
contends that the FWS mistakenly determined that its property meets the criteria in the
ESA for designation as critical habitat (Pls.’ Mem. at 23–29); second, Otay Mesa argues
that the FWS did not properly account for the economic consequences of this particular
critical habitat designation (id. at 30–42); and third, Otay Mesa argues that the FWS
improperly failed to conduct a NEPA analysis to assess the environmental impacts of
the critical habitat determination (id. at 42–48). The FWS bases its cross-motion for
summary judgment on the contentions that, as a threshold matter, Otay Mesa does not
32
have standing to challenge the critical habitat designation, and that, with respect to the
merits, the FWS’s designation of Subunit 5c as a critical habitat for the Riverside fairy
shrimp was not arbitrary or capricious in violation of the APA because the agency
conducted a proper economic analysis, reasonably determined that it need not undertake
a NEPA analysis, and has articulated rational and well-supported reasons for
concluding that the 57 acres at issue qualifies a critical habitat within the meaning of
the ESA. (Defs.’ Mem. at 10–11.)
For the reasons explained below, and as reflected in the Order issued on
September 30, 2015 (see ECF No. 29), this Court has reached the following
conclusions: (1) Otay Mesa has standing to challenge the 2012 Final Rule; (2) the FWS
did not act arbitrarily or capriciously in concluding that the stock pond on Subunit 5c
and the watershed area that feeds into the stock pond qualifies as either occupied or
unoccupied critical habitat for the purpose of the ESA; (3) the FWS conducted an
economic analysis of the critical habitat designation that was not inconsistent with the
ESA or otherwise improper; and (4) the FWS did not violate NEPA. However, because
the submitted portions of the administrative record do not contain any topographical
maps or other sources of data upon which the FWS purportedly relied in designating
Subunit 5c as critical habitat, this Court is not able to determine whether the FWS acted
rationally in concluding that the 56 acres of land surrounding the vernal pool where the
shrimp are present is watershed for the one-acre stock pond. Accordingly, the Court
will order the parties to supplement the Administrative Record Appendix and submit
supplemental briefing limited to the issue of the proper scope of the watershed for
Subunit 5c’s vernal pool.
33
A. Otay Mesa Has Standing To Challenge The Critical Habitat
Designation
Before turning to the merits of Otay Mesa’s APA claim regarding the critical
habitat designation, this Court must address the threshold issue of whether Otay Mesa
has established, by a preponderance of the evidence, Article III standing to bring its
complaint. See Haase v. Sessions, 835 F.2d 902, 906 (D.C. Cir. 1987) (“[T]he defect of
standing is a defect in subject matter jurisdiction.”); Moran v. U.S. Capitol Police Bd.,
820 F. Supp. 2d 48, 53 (D.D.C. 2011) (holding that the plaintiff bears the burden of
establishing jurisdiction by a preponderance of the evidence) (citing Lujan, 504 U.S. at
561). Defendants argue broadly that Otay Mesa has failed “to set forth specific facts
demonstrating that they have suffered a concrete, imminent injury that is traceable to
the Riverside fairy shrimp critical habitat rule and that will likely be redressed by a
favorable decision in this case” (Defs.’ Mem. at 20), and in particular, Defendants fault
Otay Mesa for not “provid[ing] declarations or other evidence demonstrating that they
have standing to raise their claim for relief.” (Id.; see also id. (criticizing Plaintiffs for
“alleg[ing] that they plan to build a recycling center and landfill on their property, [and]
citing their own comment letter in support of this statement” (internal citation
omitted)).)
Defendant’s Article III standing argument is puzzling, given the legal standards
for constitutional standing, which are well established. When addressing questions of
constitutional standing at the summary judgment stage of a case, courts consider
whether the record adequately demonstrates the following three requirements:
First, the plaintiff must have suffered an injury[-]in[-]fact—
an invasion of a legally protected interest which is (a)
concrete and particularized, and (b) actual or imminent, not
conjectural or hypothetical. Second, there must be a causal
34
connection between the injury and the conduct complained
of—the injury has to be fairly traceable to the challenged
action of the defendant, and not the result of the independent
action of some third party not before the court. Third, it must
be likely, as opposed to merely speculative, that the injury
will be redressed by a favorable decision.
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (internal quotation marks,
footnote, alterations, and citations omitted). Thus, generally speaking, “the standing
question is whether the plaintiff has ‘alleged such a personal stake in the outcome of the
controversy’ as to warrant his invocation of federal-court jurisdiction and to justify
exercise of the court’s remedial powers on his behalf.” Warth v. Seldin, 422 U.S. 490,
498–99 (1975) (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)). And a plaintiff can
satisfy this burden by showing “a ‘substantial probability’ that it has been [or will be]
injured, that the defendant caused its injury, and that the court could redress that
injury.” Sierra Club v. E.P.A., 292 F.3d 895, 899 (D.C. Cir. 2002) (citation omitted);
see also Ams. for Safe Access v. DEA, 706 F.3d 438, 443 (D.C. Cir. 2013) (explaining
that, when assessing standing, a court “must assume [plaintiffs] will prevail on the
merits of their claims” (citation and internal quotation marks omitted)).
In the present case, this Court concludes that it is self-evident from a review of
the administrative record that Otay Mesa has a personal stake in this matter and, thus,
has constitutional standing to seek review of the 2012 Final Rule. Cf. City of Waukesha
v. E.P.A., 320 F.3d 228, 233 (D.C. Cir. 2003) (explaining that it is “unnecessary” for a
petitioner to submit additional evidence in support of its standing with respect to a case
on appeal if the “standing to seek review of administrative action is self-evident”
(citation omitted)). It is undisputed that Otay Mesa participated in the underlying rule-
making proceedings by submitting, through counsel, comments objecting to the FWS’s
35
proposal to designate Subunit 5c as a critical habitat for the Riverside fairy shrimp.
(Otay Mesa Comments, AR 037643–58.) In these comments, Otay Mesa identified
itself as the owner of Subunit 5c and explained its plans to develop the Property into a
recycling center and landfill for San Diego County. (Id. 037643–48.) Otay Mesa also
explained how the FWS’s rule designating its property as critical habitat would impact
its ability to proceed with the landfill project (id. 037647–48), and the FWS has
acknowledged that the critical habitat designation will impose additional costs on the
project beyond the baseline costs Otay Mesa would incur as the result of the FWS
listing the Riverside fairy shrimp as endangered (see id. 050661). It is likewise
undisputed that Otay Mesa could proceed with construction of the landfill and recycling
facility without incurring these additional costs if this Court were to invalidate the
critical habitat designation. Thus, the administrative record on its face establishes the
necessary injury, causation, and redressability. See Lujan, 504 U.S. at 560–61.
Furthermore, even if Otay Mesa’s standing in this matter was not evident from
the administrative record, Otay Mesa has clearly cured any evidence-related deficiency
by submitting a declaration from David Wick, who has managed Subunit 5c since 1992.
(Decl. of David Wick, Ex. B. to Pls.’ Reply, ECF No. 17-2 (“Wick Decl.”), ¶ 7.) Mr.
Wick describes Otay Mesa’s plans to build a recycling facility and landfill on the
Property and declares that, “[w]ith the inclusion of the property sited for the recycling
center and landfill as critical habitat, the cost of developing that recycling center has
sharply increased—and may cause the project to be stopped altogether.” (Id.) This
additional information also suffices to establish constitutional standing under Lujan.
See 504 U.S. at 560–61; see also Otay Mesa Prop. L.P. v. U.S. Dept. of Interior, 714 F.
36
Supp. 2d 73, 80–81 (D.D.C. 2010) (holding that a declaration from Mr. Wick was
sufficient to establish standing in a prior proceeding challenging the designation of
Otay Mesa’s property as critical habitat for the San Diego fairy shrimp), rev’d on other
grounds, 646 F.3d 914 (D.C. Cir. 2011).
Defendants’ only retort is to resort to a “zone of interest” argument (see Defs.’
Mem. at 20–22) that, as Otay Mesa has indicated, might not even be properly
characterized as a standing principle. (See Pls.’ Not. of Recent Authority, ECF No. 20,
at 1–2 (quoting Lexmark Int’l v. Static Control Components, Inc., 134 S. Ct. 1377, 1387
(2014) (“[P]rudential standing is a misnomer as applied to the zone-of-interests
analysis[.]” (internal quotation marks and citation omitted))).) Even so—and even if
Otay Mesa can be considered to have brought the instant APA claim “under NEPA[,]”
(Defs.’ Mem. at 20 (emphasis added))—Defendant has failed to convince the Court that
Otay Mesa falls outside the zone of interests that NEPA was enacted to protect. In
Lexmark, the Supreme Court emphasized that “[w]hether a plaintiff comes within the
zone of interests is an issue that requires [a court] to determine, using traditional tools
of statutory interpretation, whether a legislatively conferred cause of action
encompasses a particular plaintiff’s claim.” 134 S. Ct. at 1387 (citations omitted).
Furthermore, it is well established that the zone of interests test “is not meant to be
especially demanding[,]” and that the benefit of any doubt goes to the plaintiff. Clarke
v. Secs. Industry Assn., 479 U.S. 388, 399 (1987) (citation and footnote omitted). “The
test forecloses suit only when a plaintiff’s ‘interests are so marginally related to or
inconsistent with the purposes implicit in the statute that it cannot reasonably be
assumed that Congress intended to permit the suit.’” Match-E-Be-Nash-She-Wish Band
37
of Pottawatomi Indians v. Patchak, 132 S. Ct. 2199, 2210 (2012) (quoting Clarke, 479
U.S. at 399). And the zone of interests standard is particularly generous as applied to
plaintiffs who bring suit under the APA, in light of the need to “preserv[e] the
flexibility of the APA’s omnibus judicial-review provision, which permits suit for
violations of numerous statutes of varying character that do not themselves include
causes of action for judicial review.” Lexmark Int’l, 134 S. Ct. at 1389. In the context
of a NEPA challenge under the APA, for example, the zone of interests test turns on
whether the plaintiff is among the class of people Congress authorized to sue as
“adversely affected or aggrieved by agency action within the meaning of [the] relevant
statute.” 5 U.S.C. § 702.
Here, although Defendants assert that Otay Mesa is not within NEPA’s zone of
interest because their injuries are “purely economic” rather than environmental (Defs.’
Mem. at 20 (citations omitted)), Defendants give short shrift to NEPA’s focus—which,
properly understood, is the “quality of the human environment[.]” 42 U.S.C.
§ 4332(2)(C). NEPA’s implementing regulations broadly define the “human
environment” as “the natural and physical environment and the relationship of people
with that environment[,]” 40 C.F.R. § 1508.14, and the construction of Otay Mesa’s
planned recycling and landfill facility undeniably touches upon the relationship between
the people and the environment. Thus, it is clear to this Court that Otay Mesa is within
the zone of interests of NEPA, and therefore has prudential standing, even under the
law governing standing as Defendants’ interpret it. See, e.g., Monsanto Co. v. Geertson
Seed Farms, 130 S. Ct. 2743, 2756 (2010) (concluding that plaintiffs were within
38
NEPA’s zone of interests where their alleged injury had both an economic and
environmental component).
B. The FWS’s Conclusion That The Vernal Pool And Watershed Area In
Subunit 5c Satisfy The ESA’s Critical Habitat Criterion Was Not
Arbitrary And Capricious
As explained above, the ESA authorizes the FWS to designate two types of
critical habit for endangered or threatened species: “occupied” critical habitat—defined
as “the specific areas within the geographical area occupied by the species, at the time
it is listed [as endangered or threatened under the statute], 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[,]” 16 U.S.C.
§ 1532(5)(A)(i)—and “unoccupied” critical habitat, which are “specific areas outside
the geographical area occupied by the species at the time it is listed . . . , upon a
determination by the Secretary that such areas are essential for the conservation of the
species[,]” 16 U.S.C. § 1532(5)(A)(ii). Here, the FWS decided that the Riverside fairy
shrimp “occupied” the stock pond and the watershed area surrounding the stock pond at
the time of listing, insofar as a sizable number of shrimp cysts were found in the stock
pond in 2001 and this vernal pool and its surrounding area are “essential to maintain
habitat function, genetic diversity, and species viability[.]” (2012 Final Rule, AR
045109.) Alternatively, the FWS concluded that Subunit 5c qualified as “unoccupied”
critical habitat because it was “essential for the conservation of Riverside fairy shrimp,
regardless of occupancy data at the time of listing[.]” (Id.) Otay Mesa challenges this
critical habitat determination as inconsistent with the ESA and record evidence,
asserting that the statute does not authorize alternative findings regarding occupancy
(Pls.’ Opp. to Cross-Mot. & Reply in Supp. of Pls.’ Mot. for Summ. J., ECF No. 17, at
39
8–9), and that the evidence regarding the occupancy of Riverside fairy shrimp and the
physical and biological characteristics of the surrounding area does not establish that
preserving Subunit 5c is essential to the conservation of the species (Pls.’ Mem. at 24–
29). However, this Court concludes that the FWS’s determinations regarding the
vernal pool and watershed area in Subunit 5c—i.e., its finding that these geographic
areas satisfy the statutory criteria for being designated a critical habitat for the
Riverside fairy shrimp—was rational and fully explained, and thus, that the agency’s
critical habitat conclusion was not arbitrary or capricious in violation of the APA, for
several reasons.
First of all, the record evidence amply supports the agency’s conclusion that
Riverside fairy shrimp occupied the vernal pool that exists on Subunit 5c at the time the
species was listed, and the FWS rationally determined that the watershed area
surrounding that pool is part of the occupied critical habitat for that endangered species.
Specifically, and as noted above, surveys taken in 2000, 2001, and 2011 showed that
thousands of adult Riverside fairy shrimp were identified in the stock pond during the
wet season, and that dry season soil samples consistently contained multiple desiccated
cysts. (See 2000 Survey, AR 003808; 2001 Survey, AR 004788, 004792; 2011 Survey,
AR 037263.) Given the limited migration potential of this species (2012 Final Rule,
AR 045098), the FWS reasonably explained in the 2012 Final Rule that these
“occurrences documented since the 1993 listing do not represent an expansion of the
species’ distribution and range into previously unoccupied areas, but rather a better
40
understanding of the historical distribution and range of the species.” (2012 Final Rule,
AR 045138.) 13
Furthermore, the environment surveys upon which the FWS relied confirm that
the stock pond and surrounding area in Subunit 5c contain the identified PCEs. During
the wet season, the stock pond can be inundated for up to 4 months—much longer than
the 8-week inundation minimum needed to support Riverside fairy shrimp reproduction.
(2001 Survey, AR 004787, 004788, 004792.) Moreover, the record supports the
agency’s determination that “[t]he watershed is an essential component of the vernal
pool ecosystem” and that “[t]he disturbance and/or loss of watersheds can result in
greatly reduced volume and duration of water supply in vernal pools.” (Listing
Decision, AR 000700; see also Simovich Comment, AR 032302 (“I was pleased to see a
discussion—in both documents—of the importance and complexity of watersheds and
their relevance to the designation of critical habitat in vernal pool ecosystems.”);
Bauder Peer Review, AR 032302 (noting that watershed surrounding a vernal pool is
crucial to both pool filling and chemistry).) Indeed, according to the agency, there is
evidence that the geographic area in question contains the potential for development of
a vernal pool complex, as the surveys show that “[d]uring periods of extreme
inundation, the overflow from [the stock pond] is able to flow into pool #5 and the
13
Otay Mesa appears to have conceded the occupancy point, after having initially challenged whether
the stock pond was actually occupied in 1993, at the time the Riverside fairy shrimp was listed as
endangered. (See Pls.’ Mem. at 24–25 (citing Otay Mesa Prop., 646 F.3d at 916, which held—with
respect to the San Diego fairy shrimp—that a single sighting of one shrimp in 2001 was insufficient to
support agency’s finding that property at issue was occupied in 1997 and continued to be occupied in
2007.) Counsel for Otay Mesa largely abandoned this argument at the motions hearing, stating that
Otay Mesa was “not pressing with the Court” the question of whether the stock pond was occupied at
the time of listing. (June 26, 2014 Hr’g Tr. at 17:14.) But even if counsel had not retreated from its
initial position, it is clear that the record contains substantial evidence to support the FWS’s
determination that the stock pond was occupied in 1993.
41
connectivity between the pools may allow for transfer of branchiopods from [the stock
pond] to pool #5.” (AR004788.) And the FWS regulations that implement the ESA
expressly contemplate and authorize the inclusion of watershed in a critical habitat
determination. See 50 C.F.R. § 424.12(d) (referencing as an example that, where there
are “[s]everal dozen or more small pools, lakes, and springs are found in a small local
area[, t]he entire area could be designated critical habitat if it were determined that the
upland areas were essential to the conservation of an aquatic species located in the
ponds and lakes”). It is also clear from the record that, contrary to Otay Mesa’s
assertions, the fact that the stock pond in Subunit 5c is an artificial depression is
irrelevant to whether it qualifies as a vernal pool or occupied habitat (see 2012 Final
Rule, AR 045093 (“Habitats include natural and created pools[;] some of these habitats
are artificial pools (cattle watering holes and road embankments)[.])”.) Thus, this
Court concludes based on the evidence in the record and the existing regulatory scheme,
that it was entirely reasonable for the FWS to reach the conclusion that the stock pond
and some portion of the area around it (i.e., “the watershed”) satisfied the definition of
“occupied” critical habitat that required preservation under the ESA.
Second, even if the record was such that the FWS’s “occupied” critical habitat
finding was not warranted, the agency reached an alternative conclusion that fully
supports its critical habitat designation: that Subunit 5c qualifies as “unoccupied”
critical habitat because preservation of the stock pond and watershed is essential to the
conservation of the shrimp that indisputably exist there at present. After considering a
variety of scientific evidence, the FWS made the unequivocal finding that “Subunit 5c
contains the physical or biological features essential to the conservation of the species
42
including ephemeral wetland habitat (PCE 1), intermixed wetland and upland habitats
that act as the local watershed (PCE 2), and topography and soils that support ponding
during spring months (PCE 3).” (2012 Final Rule, AR 045139.) To reach this
conclusion, the agency conducted a detailed, scientific assessment of the physical and
biological features of the pond and the surrounding area, and it is clear beyond cavil
that the FWS’s judgment regarding the highly technical and scientific matter of whether
or not a geographic area has the requisite PCEs is entitled to substantial deference. See
Huls Am. Inc. v. Browner, 83 F.3d 445, 452 (D.C. Cir. 1996) (court must “give an
extreme degree of deference to the agency when it ‘is evaluating scientific data within
its technical expertise’” (quoting Int’l Fabricare Inst. v. U.S. EPA, 972 F.2d 384, 389
(D.C. Cir. 1992))); see also Marsh v. Ore. Nat. Res. Council, 490 U.S. 360, 377 (1989)
(where agency’s’ decision “requires a high level of technical expertise,” reviewing
courts must defer to “the informed discretion of the responsible federal agencies.”).
What is more, “[w]ith regard to FWS decisions in particular, ‘[g]iven the expertise of
the [Service] in the area of wildlife conservation and management and the deferential
standard of review, the Court begins with a strong presumption in favor of upholding
decisions of the [Service].’” Am. Wildland v. Kempthorne, 478 F. Supp. 2d 92, 96
(D.D.C. 2007) (alterations in the original) (quoting Carlton v. Babbitt, 900 F. Supp.
526, 530 (D.D.C. 1995)). Indeed, in a prior case involving this same property, the D.C.
Circuit expressly stated that the courts must respect the FWS’s judgment regarding
whether to designate land as unoccupied critical habitat, so long as the agency “sa[id]
so in its agency decision and justif[ied] that determination.” Otay Mesa Prop., 646
F.3d at 918 (citation omitted).
43
Otay Mesa’s suggestion here that the FWS was not entitled to conclude in the
alternative that Subunit 5c was either “occupied” or “unoccupied” as a matter of law
(Pls.’ Opp’n to Cross-Mot. & Reply in Supp. of Pls.’ Mot. for Summ. J., ECF No. 17, at
8–9) finds no support in the ESA or in D.C. Circuit case law, and in any event, is
seemingly immaterial to the APA claim at hand. Nowhere does the statute state that the
“occupied” and “unoccupied” determinations are mutually exclusive when the agency is
assessing a geographic area, and one could imagine a scenario—such as the one
presented in this case—in which either definition could reasonably be deemed
applicable. See Home Builders Ass’n of N. Cal. v. U.S. Fish & Wildlife Serv., 616 F.3d
983, 990 (9th Cir. 2010) (“There is no requirement that every area be classified as one
or the other, and, in the case of vernal pool complexes, which may change dramatically
from year to year, such a classification may be impossible.”). Furthermore, both
definitions require the agency to make a reasoned determination regarding the same
critical factual issue: whether preservation of the area that is under consideration is
essential to the conservation of the listed species. In other words, regardless of whether
the area at issue is itself “occupied” by the species, or is not presently occupied but is
nevertheless essential to the species’ conservation, the agency has clear statutory
authority to designate that area a “critical habitat” under the ESA.
The bottom line is this: the critical habitat designation “is a highly contextual
and fact-dependent inquiry[,]” Ariz. Cattle Growers’ Ass’n, 606 F.3d at 1164, and this
Court has concluded that it was entirely reasonable for the FWS to apply its scientific
expertise to the known facts regarding Subunit 5c and thereby deem the vernal pool and
surrounding watershed area “critical habitat” for the Riverside fairy shrimp. As
44
explained in Part III.E, infra, the FWS has not provided the Court with the
topographical maps and other record evidence that purportedly justifies its conclusion
that the entirety of the 56 acres that surround the vernal pool on Subunit 5c is
watershed, and thus this Court is presently unable to determine whether the agency
acted rationally with respect to the specific “critical habitat” boundaries that the agency
has designated; however, this Court sees nothing arbitrary or capricious about the
FWS’s foundational determinations that (1) there are endangered Riverside fairy shrimp
in Subunit 5c’s vernal pool and, thus, at the very least, the pool itself is a critical
habitat entitled to protection, and (2) the watershed area around the pool is also
essential to preservation of the species and is therefore properly subject to protection
under the ESA.
C. The FWS’s Economic Analysis Was Not Inconsistent With The ESA
Or Otherwise Improper
Otay Mesa’s challenge to the FWS’s economic analysis in this case is multi-
faceted. First, Otay Mesa asserts that the FWS’s economic analysis is flawed because
Subunit 5C has been zoned and approved for the building of a recycling center and a
landfill, but the FWS failed to account for the “enormous social impacts” of scuttling
that project, and its economic analysis assumed mere future residential development for
the property at issue. (Pls.’ Mem. at 31.) Otay Mesa also asserts that the FWS
improperly utilizes the “discredited” baseline method, as opposed to the co-extensive
method, when the agency undertakes to conduct economic analyses of critical habitat
designations, in violation of the ESA’s mandates. (Id. at 38.) And assuming arguendo
that the ESA permits the FWS to use the baseline methodology, Otay Mesa also
maintains that the FWS’s application of the methodology in this case was improper
45
because the agency had used the co-extensive analysis when it previously analyzed the
critical habitat, and therefore should have used that methodology in this rulemaking
proceeding as well. Finally, Otay Mesa claims that the FWS “misapplied” the baseline
methodology, because it failed to consider the costs related to the first critical habitat
designation (the one made pursuant to the 2005 rulemaking process, in which Subunit
5c was excluded), when it made the calculations at issue here. (See Pls. Mem. at 42
(“FWS’s 2012 economic analysis does not even attempt to measure th[e] change
between the critical habitat that existed through 2005 and the critical habitat that
existed after promulgation of the 2012 designation and thus does not utilize the baseline
method as FWS claims.”).)
None of these arguments persuades this Court that the FWS acted arbitrarily or
capriciously in violation of the APA with respect to the economic analysis it employed
in this case.
1. The FWS’s Analysis Of The Cost Of The Critical Habitat
Designation Was Rational And Adequately Explained
As noted previously, the FWS released the statutorily-required economic analysis
of the critical habitat determination on August 30, 2012. (2012 Proposed Rule Econ.
Analysis, AR 050651–771.) The 2012 Proposed Rule Economic Analysis employed the
baseline methodology to measure the incremental costs associated with the critical
habitat designation, which the agency found were largely the costs associated with
administrative efforts to comply with regulatory requirements that arose as a result of
the critical habitat designation, as well as costs associated with the resulting time
delays. (Id. 050680). For the purpose of its calculations, the Economic Analysis
“relie[d] on local planning authorities for estimates of the number of housing units
46
projected to be built by 2035 in the census tracts encompassing the study area.” (Id.
050704.) However, the analysis also noted that the “plans are currently in place to
develop the East Otay Mesa Recycling Collection Center and Landfill project in [the]
vicinity of Subunit 5C[,]” and in any event, the agency ultimately concluded it is
“unlikely that critical habitat designation would impose any incremental costs on this
project” because Riverside fairy shrimp occupied the area, and the FWS would
therefore have to evaluate the effects of any proposed project, regardless of whether or
not the area is designated as critical habitat. (Id. 050719 n.94.) The analysis also
acknowledged that, while the overall incremental costs would be minimal, Subunit 5c
would shoulder a significant portion of these costs. (Id. 050660, 050719–80.)
Nevertheless, the Secretary decided not to exclude Subunit 5c from the critical habitat
designation because “designation of critical habitat would not meaningfully influence
whether a landfill can be constructed in Subunit 5c as there are existing constraints on
development of these lands due to the presence of Riverside fairy shrimp and [another
listed species.]” (2012 Final Rule, AR 045140.) The agency has provided a clear and
cogent explanation of the analysis it employed, and thus, this Court has little trouble
concluding that the FWS has satisfied its statutory obligation to evaluate the economic
impact of its critical habitat designation.
Otay Mesa’s primary argument with respect to the 2012 Proposed Rule Economic
Analysis is that the analysis was improper because the FWS did not add into its calculus
the “public and private benefit to be achieved” through the completion of the landfill
and recycling center project (Pls.’ Mem. at 34–36); instead, it “hired a consultant to
prepare a generic economic analysis that treats all unimproved private property pretty
47
much the same[,]” and that consultant “assume[d] all private property will be developed
into housing units—a use entirely incompatible with Otay Mesa’s property.” (Pls.’
Mem. at 39–37.) But this argument provides no basis for the Court to invalidate the
critical habitat determination as arbitrary and capricious, for several reasons.
First of all, to the extent that Otay Mesa emphasized to the FWS that “Otay
Mesa’s property will provide a social service to San Diego County because Otay Mesa
plans to build a new, state-of-the-art, much-needed recycling center and landfill” (Pls.’
Mem. at 31), it has not demonstrated here that the agency was required to include the
“social” impact of the missed opportunity to undertake a planned land-use project—no
matter how beneficial—in its economic analysis, nor has Otay Mesa shown that the
standard baseline methodology permits consideration of such costs. Indeed, as the
agency explained, the baseline methodology requires exclusion of all costs that would
have been incurred anyway as a result of the presence of Riverside fairy shrimp on the
premises or otherwise, and the agency reasonably determined that, because “the costs
associated with avoiding adverse modification of critical habitat are likely to mirror
those necessary to avoid jeopardy to the species[,]” few if any “incremental” costs
would be incurred as a result of the critical habitat designation. (2012 Final Rule, AR
045140.) Moreover, while Otay Mesa’s brief goes on at length about “the enormous
social benefits of the landfill for the millions of residents of San Diego County” and
how “extremely challenging” it is to find land appropriate for a recycling center and
landfill (Pls.’ Mem. at 35), it fails to cite a single case in which the FWS was found to
have violated the APA when it employed the baseline methodology but did not include
48
the “social” costs of preserving the critical habitat as one of the incremental, above-the-
baseline variables.
Nor can Otay Mesa insist that the critical habitat designation at issue here
violated the APA because the FWS decided not to exercise its discretion to exclude
Subunit 5c. It is clear beyond cavil that this Court lacks the authority under the APA to
review agency action where the action “is committed to agency discretion by law.” 5
U.S.C.§ 701(a). The Supreme Court has explained that an action is committed to
agency discretion “if the statute is drawn so that a court would have no meaningful
standard against which to judge the agency’s exercise of discretion.” Heckler v.
Chaney, 470 U.S. 821, 830 (1985). Here, the ESA empowers the FWS to “exclude any
area from critical habitat if [it] determines that the benefits of such exclusion outweigh
the benefits of specifying such area as part of the critical habitat, unless [it] determines
[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). “The plain reading of the statute fails
to provide a standard by which to judge the Service’s decision not to exclude an area
from critical habitat[,]” which means this Court cannot review the FWS’s exclusion—or
non-exclusion—decisions. Cape Hatteras Access Pres. Alliance v. U.S. Dep’t of the
Interior, 731 F. Supp. 2d 15, 29 (D.D.C. 2010); see also Aina Nui Corp. v. Jewell, 52 F.
Supp. 3d 1110, 1132 n.4 (D. Haw. 2014) (“The Court does not review the Service’s
ultimate decision not to exclude LDU–8 from designation, which is committed to the
agency’s discretion.”).
To the extent that Otay Mesa challenges the “generic” nature of the FWS’s
economic analysis and the fact that it “treats all unimproved private property pretty
49
much the same—regardless of its highest and best use or whether it has substantial
economic value that will be taken by the regulation” (Pls. Mem. at 36), it appears that
Otay Mesa has actually waived this argument. Nat’l Wildlife Fed’n v. EPA, 286 F.3d
554, 562 (D.C. Cir. 2002) (“It is well established that issues not raised in comments
before the agency are waived and this Court will not consider them.”); see also
Advocates for Highway & Auto Safety v. Fed. Motor Carrier Safety Admin., 429 F.3d
1136, 1150 (D.C. Cir. 2005) (“[A] party will normally forfeit an opportunity to
challenge an agency rulemaking on a ground that was not first presented to the agency
for its initial consideration.”). The reasoning behind application of this waiver
principle is two-fold. “First, the courts are not authorized to second-guess agency
rulemaking decisions; rather, the role of the court is to determine whether the agency’s
decision is arbitrary and capricious for want of reasoned decision making.” Advocates
for Highway & Auto Safety, 429 F.3d at 1150 (citing Motor Vehicle Mfrs. Ass’n, 463
U.S. at 43). Second, “[s]imple fairness . . . requires as a general rule that courts should
not topple over administrative decisions unless the administrative body . . . has erred
against objection made at the time appropriate under its practice.” United States v. L.A.
Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952). Here, Otay Mesa submitted a detailed
comment letter to the FWS challenging the critical habitat designation and draft
economic analysis on numerous bases, and nowhere in this letter did Otay Mesa
challenge the FWS’s assumption of residential development for the proposed critical
habitat. (See AR 037657–58 (challenging assumptions of even development and mean
project size of 13.5 housing units, but not residential development assumption).) In
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light of this failure at the rule-making stage, it would be improper for this Court to rule
on the propriety of the FWS’s assumption.
But even if the Court were to reach the merits of Otay Mesa’s argument that the
FWS improperly used residential housing assumptions in the 2012 Proposed Rule
Economic Analysis, this Court still would find no basis on which to invalidate the 2012
Proposed Rule. This is because, first and foremost, the text of 2012 Proposed Rule
Economic Analysis belies Otay Mesa’s argument that the FWS did not take into account
the fact that Subunit 5c might ultimately be used as a recycling center and landfill. The
economic analysis both acknowledges this proposed use and expressly analyzes the
incremental costs that would follow from the critical habitat designation. (Id. 050719
n.94.) In addition, it is clear beyond cavil that the FWS is entitled to a presumption of
regularity—that is, a presumption that it properly discharged its duties—with respect to
its analysis of the economic consequences of the critical habitat designation. See Latif
v. Obama, 677 F.3d 1175, 1178 (D.C. Cir. 2012). To overcome this presumption with
respect to the contractor’s reliance on residential housing assumptions, Otay Mesa must
point to superior data that the FWS could have used but did not. See Bldg. Indus. Ass’n
v. Norton, 247 F.3d 1241, 1246-47 (D.C. Cir. 2001). Otay Mesa’s motion does no such
thing; instead, it makes the bald contention that the FWS prepared a “generic” analysis
of costs that “failed to provide any useful information to the decision-maker concerning
the economic impact of designating Otay Mesa’s land as critical habitat.” (Pls.’ Mem. at
37.) In light of the relevant standards and as far as the APA claim is concerned, this
Court concludes that the failure here is on Otay Mesa’s part, and not the agency’s.
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2. The FWS’s Decision To Evaluate The Economic Effects
Using The Baseline Methodology Is Entitled To Chevron
Deference
In addition to challenging what it perceives to be the FWS’s undervaluing of the
costs of including Subunit 5c in the critical habitat designation, Otay Mesa also attacks
the agency’s choice of methodology for assessing economic effects. As explained
above, Congress has required the FWS to measure and consider the economic impact of
making a critical habit designation, and there are two common approaches to measuring
such economic impacts: the baseline approach, pursuant to which the FWS removes
from the economic calculus those protections afforded to a species as the result of the
FWS listing a species as endangered or threatened, and the co-extensive approach,
which requires the FWS to consider both the costs associated with the FWS listing the
species as endangered or threatened and the additional incremental costs of designating
land as critical habitat. The FWS has alternated between these two approaches over
time, 77 Fed. Reg. 51508, and the agency is quite candid that these changes have partly
resulted from evolving case law on the proper approach to conducting the economic
analysis that the ESA requires. Compare N.M. Cattlegrowers Ass’n, 248 F.3d at 1285
(“expressly reject[ing]” the baseline approach), with Ariz. Cattle Growers’ Ass’n, 606
F.3d at 1173–74 (rejecting the co-extensive approach). Otay Mesa characterizes this
shift in methodology as a “repeated flip-flop” regarding what the ESA requires with
respect to the prescribed economic analysis that is not entitled to Chevron deference.
(Pls.’ Mem. at 40 (arguing that “the Chevron doctrine of deference has no application
where, as here, the agency’s repeated flip-flop on whether the ESA requires a baseline
or a coextensive analysis leaves the court little or no reliable agency interpretation to
which it can defer”).)
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This Court disagrees. Although the ESA expressly requires that the FWS
consider the economic effects of a critical habitat designation, the statute does not
“directly speak” to the precise methodology that the Service must use to accomplish
this mandate. Chevron, 467 U.S. at 842. Given the ESA’s silence on this issue, the
Court must move to step two of the Chevron analysis, and thereby defer to the FWS’s
construction of the ESA “unless it is arbitrary or capricious in substance, or manifestly
contrary to the statute.” Mayo Found., 564 U.S. at 52. After nearly two decades of
litigation regarding critical habitat determinations, it is fairly well established that the
FWS’s decision to employ the baseline method when it evaluates economic effects is
not substantively arbitrary and capricious, or so inconsistent with the statutory
framework, that Chevron deference is not due. See Cape Hatteras Access Pres.
Alliance v. U.S. Dep’t of Interior, 344 F. Supp. 2d 108, 130 (D.D.C. 2004) (“The
baseline approach is a reasonable method for assessing the actual costs of a particular
critical habitat designation.”); see also, e.g., Home Builders Ass’n, 616 F.3d 983, 992–
93; Ariz. Cattle Growers’ Ass’n, 606 F.3d at 1173–74; Alaska Oil & Gas Ass’n v.
Salazar, 916 F. Supp. 2d 974 (D. Alaska 2013).
What is more, it is also quite clear that an agency can change its mind about the
proper interpretation of a statute, so long as it provides a rational explanation for the
change. See Inv. Co. Inst. v. Commodity Futures Trading Comm’n, 720 F.3d 370, 377
(D.C. Cir. 2013) (agency faces a “low bar” in justifying a change in approach); Anna
Jaques Hosp. v. Sebelius, 583 F.3d 1, 6 (D.C. Cir. 2009); Nat. Res. Def. Council v.
Nat’l Marine Fisheries Serv., No. 12cv0938 (KBJ), 2014 WL 5148407, at *17 (D.D.C.
Oct. 14, 2014). Here, the FWS provided such a rational explanation: it stated that the
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agency “developed [its] current [baseline] methodology in response to conflicting court
decisions” and that its current use of the baseline methodology “addresses the divergent
opinion of the courts and provides a thorough review for policymakers that enables
them to consider the true costs of critical habitat designation, by comparing the costs
that would occur solely as a result of designation to those costs that would occur in the
absence of designation.” (2012 Final Rule, AR 045141.) And while it may be the case
that the FWS’s current interpretation is “entitled to considerably less deference than a
consistently held agency view” (Pls.’ Mem. at 41 (quoting I.N.S. v. Cardoza-Fonseca,
480 U.S. 421, 488 (1987) (emphasis added and internal quotation marks omitted))),
“less” deference does not mean none; and furthermore, Otay Mesa’s characterization of
the agency’s present position as a “convenient litigating position” and its suggestion
that the FWS has flouted a direct court order to use the co-extensive approach (Pls.’
Mem. at 41) find no support in the record.
To be sure, Otay Mesa is correct to point out that the method the FWS must
utilize to conduct an economic analysis under the ESA is a question of law (June 26,
2014 Hr’g Tr. at 19:3–17), but the relevant question is whether or not this Court must
defer to the FWS’s interpretation when considering that legal question. Otay Mesa has
not demonstrated that the mere fact that the FWS has changed its mind regarding the
appropriate interpretation of the ESA economic analysis requirement somehow divests
the FWS of all of the Chevron deference to which it is otherwise due. See Ala. Educ.
Ass’n v. Chao, 455 F.3d 386, 396 (D.C. Cir. 2006) (“[A]n agency’s interpretation of a
statute is entitled to no less deference . . . simply because it has changed over time.
Rather, the question . . . is whether the [agency] has supported its new reading of [the
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statute] with a reasoned analysis sufficient to command our deference under Chevron.”
(internal quotation marks and citation omitted)). And after affording the agency’s
reasoned decision making the deference that it is due, this Court cannot conclude that
the FWS’s decision to calculate costs using the baseline methodology—a change that
the agency specifically addressed in the 2012 Final Rule—was arbitrary and capricious.
3. The Agency’s Application Of The Baseline Methodology In
This Case Was Neither Arbitrary And Capricious Nor
Erroneous
To the extent that Otay Mesa suggests that the agency acted arbitrarily when it
applied the baseline methodology in this case because it had previously employed the
co-extensive methodology in prior rulemaking proceedings regarding the critical habitat
of the Riverside fairy shrimp, it is mistaken. The FWS consistently and clearly
explained how and why its reading of the law changed (and changed back again) as the
result of developments in case law at numerous instances in the rulemaking
proceedings, and it provided this explanation in the 2011 Proposed Rule, in the 2012
Proposed Rule, in the 2012 Proposed Rule Economic Analysis, and in the 2012 Final
Rule at issue here. (See, e.g., AR 037617 (stating that, in the time since the FWS
finalized the 2005 economic analysis, “courts . . . have held that an incremental analysis
of impacts stemming solely from the critical habitat rulemaking is proper, and as such,
is the current [draft economic analysis] framework approach used by the Service”).)
There is nothing irrational about this evolution, and thus, the FWS has satisfied the
requirements of the APA. See Nat. Res. Def. Council, 2014 WL 5148407, at *18; cf.
Citizens to Preserve Overton Park, 401 U.S. at 416 (explaining that, when evaluating
whether an agency has acted in violation of the APA’s standards, a court only
“consider[s] whether the [agency’s] decision was based on a consideration of the
55
relevant factors and whether there has been a clear error of judgment[,]” and the court
“is not empowered to substitute its judgment for that of the agency”).
Moreover, Otay Mesa’s contention that the FWS misapplied the baseline method
because it did not consider its prior 2005 cost calculation related to the initial
designation of 306 acres to be the relevant baseline (see Pls. Mem. at 41 (asserting that
“[t]he regulatory baseline in this case is the original critical habitat designation that
FWS made in 2005 and that was replaced by the 2012 designation under review in this
case”)) is incomprehensible, and thus entirely unpersuasive. Otay Mesa appears to
suggest that the FWS should have used the 2005 critical habitat designation as the
baseline for the instant rulemaking proceedings, and not the 1993 listing decision, but
this contention misunderstands the entire premise of the baseline approach, which is to
remove from the economic calculus those costs that are associated with the protections
that a species receives as a result of the FWS’s decision to list that species as
endangered or threatened. See Ariz. Cattle Growers’ Ass’n, 606 F.3d at 1172–73
(“[T]he economic analysis of the critical habitat designation . . . is not intended to
incorporate the burdens imposed by listing the species.”). Thus, the baseline is
necessarily tied to the listing date, rather than some other date that arose as a result of
litigation, and the relevant costs are only those incremental costs that are incurred
above and beyond the costs that have been imposed due to the listing of the species.
In the final analysis, then, this Court finds that Otay Mesa has not provided any
reason to conclude that the FWS acted arbitrarily and capriciously or in violation of the
ESA when it utilized the baseline method to evaluate the incremental costs of its listing
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decision, and when it ultimately decided that such costs did not outweigh the benefits of
designating Subunit 5c as part of the critical habitat for the Riverside fairy shrimp.
D. The FWS Was Not Obliged To Conduct A NEPA Analysis In
Connection With Its Critical Habitat Determination
Otay Mesa’s argument that the FWS violated NEPA when it designated Subunit
5c as critical habitat for the Riverside fairy shrimp also fails. The FWS has taken the
position that “outside the jurisdiction of the U.S. Court of Appeals for the Tenth
Circuit, we do not need to prepare environmental analyses as defined by NEPA in
connection with designating critical habitat under the [ESA].” (2012 Final Rule,
045140.) “[W]here an agency concludes that NEPA does not apply to its actions at all,
the agency’s decision is ‘not entitled to the deference that courts must accord to an
agency’s interpretation of its governing statute and is instead a question of law, subject
to de novo review.’” Sierra Club v. U.S. Army Corps of Eng’rs, 990 F. Supp. 2d 9, 22–
23 (D.D.C. 2013) (quoting Sierra Club v. U.S. Dep’t of Agric., 777 F. Supp. 2d 44, 54
(D.D.C. 2011). The parties acknowledge that there is a Circuit split on this issue, with
the primary cases coming from the Tenth Circuit—which has held that the FWS must
conduct a NEPA analysis when designating critical habitat—and the Ninth Circuit—
which has held that NEPA is inapplicable to a critical habitat designation. Compare
Catron Cty., 75 F.3d at 1436, with Douglas Cty., 48 F.3d at 1502–05. As explained
below, this Court believes that the Ninth Circuit has the better of the argument.
In Catron County, the Tenth Circuit held that the FWS must comply with NEPA
when designating critical habitat under the ESA for three independent reasons. First, it
found that ESA procedures have not replaced NEPA requirements “given the focus of
the ESA together with the rather cursory directive that the Secretary is to take into
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account economic and other relevant impacts[.]” Catron Cty., 75 F.3d at 1436 (internal
quotation mark omitted). Second, the court found that “actual impact flows from the
critical habitat designation[,]” and thus it was necessary to determine the nature and
scope of those impacts. Id. And third, the court found that “compliance with NEPA
will further the goals of the ESA.” Id.
In Douglas County, the Ninth Circuit reached the opposite conclusion on each of
these questions and held that NEPA was inapplicable to critical habitat determinations.
First, the court found, based on the ESA’s legislative history, that “Congress intended
that the ESA procedures for designating a critical habitat [would] replace the NEPA
requirements.” Id. at 1503. Second, the court found that “NEPA procedures do not
apply to federal actions that do nothing to alter the natural physical environment[,]” and
that a critical habitat designation protects the environment, and does not interfere with
or change it. Id. at 1505–06. Finally, the court found that “the ESA furthers the goals
of NEPA without demanding an EIS. . . . [because b]y designating critical habitats for
endangered or threatened species, the Secretary ‘is working to preserve the environment
and prevent the irretrievable loss of a natural resource.’” Id. at 1506 (quoting Pac.
Legal Found. v. Andrus, 657 F.2d 829, 837 (6th Cir. 1981)). This is in accord with
NEPA’s aim of “provid[ing] a mechanism to enhance or improve the environment and
prevent further irreparable damage.” Pac. Legal Found., 657 F.2d at 837.
This Court agrees with the Ninth Circuit on each of the three independent
grounds that it identified and discussed in Douglas County, and adopts its reasoning.
Thus, the Court concludes that the FWS did not act arbitrarily or in violation of the law
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when it declined to prepare and EIS in connection with its designation of a critical
habitat for the Riverside fairy shrimp.
E. The Current Appendix Is Insufficient To Permit This Court To Evaluate
The Scope Of The Designated Area
To recap what has been explained above, this Court has concluded that the FWS
did not act arbitrarily or capriciously when it determined that endangered Riverside
fairy shrimp occupy the vernal pool on Subunit 5c and that the pool and the surrounding
watershed area are “critical habitat” for that listed species within the meaning of the
ESA, nor did the agency’s economic analysis and its refusal to prepare an EIS under
NEPA violate the law or otherwise constitute arbitrary or capricious action on the part
of the agency. Nevertheless, Otay Mesa has asserted that “the administrative record in
this case contains no factual support for the Secretary’s finding that the 56 unoccupied
acres of Otay Mesa’s property is essential to the conservation of the Riverside fairy
shrimp” (Pls.’ Opp’n. at 14), and indeed, the portions of the administrative record that
have been submitted to this Court fall short of clearly establishing that the 56 acres of
land surrounding the one-acre stock pond is all watershed and thus is essential to the
conservation of the endangered shrimp. (See Defs.’ Reply in Supp. of Cross-Mot. for
Summ. J., ECF No. 19, at 14 (“The rest of the acreage included in subunit 5c is the
surrounding watershed that is necessary to support the Riverside fairy shrimp in the
stock pond.”).) To be sure, the FWS has provided a detailed explanation of the
methodology that the Service purportedly utilized in determining that the 56 acres is
watershed (see, e.g., 2011 Proposed Rule, AR 055614–48), and it has also touted the
existence of topographical maps that show precisely how that methodology has been
applied by the agency to the land at issue in this case. (See 2012 Final Rule, AR
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045139–40.) But the Appendix does not contain these maps, and the record that has
been submitted is otherwise completely silent regarding the specific hydrology of the 56
acres of land that the FWS contends is watershed—for example, it does not address with
specificity how rain flow and subsurface flow contribute to inundation of the stock
pond.
Given this omission and in light of the FWS’s own admission that “watersheds
vary in size and cannot be generalized” (AR 045095), this Court is in no position to
assess the rationality of the FWS’s decision that the 56 acres of Subunit 5c that
surround the one-acre stock pond constitutes watershed for the vernal pool on the
property. (See Pls.’ Opp’n at 14–15; see also 2012 Final Rule, AR 045095 (explaining,
with respect to vernal pools, that “[t]he size of associated watersheds likely varies from
a few acres to greater than 100 ac[res]” and “are affected by factors including surface
and underground hydrology, the topography of the area surrounding the pool or pools,
the vegetative coverage, and the soil substrates in the area”).) No less an authority than
the Supreme Court has made clear that it is the role of this Court to ensure that the
Service has “examine[d] the relevant data and articulate[d] a satisfactory explanation
for its action[,]” Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43, and in the absence of any
evidence showing what specific data the FWS considered in concluding that the 56
acres around the admittedly-occupied stock pond are watershed for that vernal pool, this
Court cannot determine whether “the record belies the agency’s conclusion[,]” Cty. of
Los Angeles v. Shalala, 192 F.3d 1005, 1021 (D.C. Cir. 1999) (internal quotation marks
and citation omitted). (See also Bauder Peer Review, AR 032302 (commenting that the
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state of the record was such that the vernal pool networks and watersheds underlying
the critical habitat designation at issue here could not be verified).)
IV. CONCLUSION
As explained above, this Court finds that Otay Mesa has standing to challenge
the FWS’s designation of its property as critical habitat for the Riverside fairy shrimp;
that it was not arbitrary or capricious for the FWS to conclude that a watershed
surrounding the stock pond qualifies as critical habitat; that the FWS’s economic
analysis of the critical habitat designation was not inconsistent with the ESA or
otherwise improper; and that it was not arbitrary or capricious for the FWS to conclude
that it need not comply with NEPA requirements when designating critical habitat for a
protected species. However, because the current Appendix of documents from the
administrative record does not contain the factual basis for the agency’s determination
that the 56 acres that surround the vernal pool in Subunit 5c is watershed, the Court
cannot determine if Defendants have acted arbitrarily in designating the entire area
referred to as Subunit 5c as critical habitat. Because Defendants have indicated that the
portions of the administrative record not currently before this Court may, in fact,
contain sufficient facts to support the FWS’s determinations regarding the scope of the
designated area, this Court has not vacated the critical habitat determination or
remanded this matter to the FWS at this time. Rather, as noted in the Order of
September 30, 2015, and explained further in the Supplemental Order that will issue
along with this Memorandum Opinion, the Court will require the parties to file
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supplemental briefing and submit additional materials from the administrative record on
this limited factual question.
Date: November 13, 2015 Ketanji Brown Jackson
KETANJI BROWN JACKSON
United States District Judge
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