National Ass'n of Home Builders v. Defenders of Wildlife

(Slip Opinion) OCTOBER TERM, 2006 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is

being done in connection with this case, at the time the opinion is issued.

The syllabus constitutes no part of the opinion of the Court but has been

prepared by the Reporter of Decisions for the convenience of the reader.

See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

Syllabus

NATIONAL ASSOCIATION OF HOME BUILDERS

ET AL. v. DEFENDERS OF WILDLIFE ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

No. 06–340. Argued April 17, 2007—Decided June 25, 2007*

Under the Clean Water Act (CWA), petitioner Environmental Protec

tion Agency (EPA) initially administers each State’s National Pollu

tion Discharge Elimination System (NPDES) permitting program,

but CWA §402(b) provides that the EPA “shall approve” transfer of

permitting authority to a State upon application and a showing that

the State has met nine specified criteria. Section 7(a)(2) of the En

dangered Species Act of 1973 (ESA) requires federal agencies to con

sult with agencies designated by the Secretaries of Commerce and

the Interior to “insure” that a proposed agency action is unlikely to

jeopardize an endangered or threatened species. The Fish and Wild

life Service (FWS) and the National Marine Fisheries Service

(NMFS) administer the ESA. Once a consultation process is com

plete, a written biological opinion is issued, which may suggest alter

native actions to protect a jeopardized species or its critical habitat.

When Arizona officials sought EPA authorization to administer the

State’s NPDES program, the EPA initiated consultation with the

FWS to determine whether the transfer would adversely affect any

listed species. The FWS regional office wanted potential impacts

taken into account, but the EPA disagreed, finding that §402(b)’s

mandatory nature stripped it of authority to disapprove a transfer

based on any other considerations. The dispute was referred to the

agencies’ national offices for resolution. The FWS’s biological opinion

concluded that the requested transfer would not jeopardize listed

species. The EPA concluded that Arizona had met each of §402(b)’s

——————

* Together with No. 06–549, Environmental Protection Agency v. De

fenders of Wildlife et al., also on certiorari to the same court.

2 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

OF WILDLIFE

Syllabus

nine criteria and approved the transfer, noting that the biological

opinion had concluded the consultation “required” by ESA §7(a)(2).

Respondents sought review in the Ninth Circuit, petitioner National

Association of Home Builders intervened, and part of respondent De

fenders of Wildlife’s separate action was consolidated with the suit.

The court held that the EPA’s transfer approval was arbitrary and

capricious because the EPA had relied on contradictory positions re

garding its §7(a)(2) responsibilities during the administrative proc

ess. Rather than remanding the case for the agency to explain its de

cision, however, the court reviewed the EPA’s substantive

construction of the statutes. It did not dispute that Arizona had met

CWA §402(b)’s nine criteria, but nevertheless concluded that ESA

§7(a)(2) required the EPA to determine whether its transfer decision

would jeopardize listed species, in effect adding a tenth criterion.

The court dismissed the argument that the EPA’s approval was not

subject to §7(a)(2) because it was not a “discretionary action” under

50 CFR §402.03, §7(a)(2)’s interpretative regulation. The court thus

vacated the EPA’s transfer decision.

Held:

1. The Ninth Circuit’s determination that the EPA’s action was ar

bitrary and capricious is not fairly supported by the record. This

Court will not vacate an agency’s decision under the arbitrary and

capricious standard unless the agency “relied on factors which Con

gress had not intended it to consider, entirely failed to consider an

important aspect of the problem, offered an explanation for its deci

sion that runs counter to the evidence before the agency, or is so im

plausible that it could not be ascribed to a difference in view or the

product of agency expertise.” Motor Vehicle Mfrs. Assn. of United

States, Inc. v. State Farm Mut. Automobile Ins. Co., 463 U. S. 29, 43.

Here, the Ninth Circuit concluded that the EPA’s decision was inter

nally inconsistent in its statements during the review process. Fed

eral courts ordinarily are empowered to review only an agency’s final

action, and the fact that a local agency representative’s preliminary

determination is later overruled at a higher agency level does not

render the decisionmaking process arbitrary and capricious. The

EPA’s final approval notice stating that §7(a)(2)’s required consulta

tion process had been concluded may be inconsistent with its previ

ously expressed position—and position in this litigation—that

§7(a)(2)’s consultation requirement is not triggered by a §402 transfer

application, but that is not the type of error requiring a remand. By

the time the statement was issued, the EPA and FWS had already

consulted, and the question whether that consultation had been re

quired was not germane to the final agency decision. Thus, this

Court need not further delay the permitting authority transfer by

Cite as: 551 U. S. ____ (2007) 3

Syllabus

remanding to the agency for clarification. Respondents suggest that

the EPA nullified their right to participate in the application proceed

ings by altering its legal position during the pendency of the transfer

decision and its associated litigation, but they do not suggest that

they were deprived of their right to comment during the comment pe

riod made available under the EPA’s regulations. Pp. 10–14.

2. Because §7(a)(2)’s no-jeopardy duty covers only discretionary

agency actions, it does not attach to actions (like the NPDES permit

ting transfer authorization) that an agency is required by statute to

undertake once certain specified triggering events have occurred.

Pp. 14–25.

(a) At first glance the legislative commands here are irreconcil

able. Section 402(b)’s “shall approve” language is mandatory and its

list exclusive; if the nine specified criteria are satisfied, the EPA does

not have the discretion to deny a transfer application. Section

7(a)(2)’s similarly imperative language would literally add a tenth

criterion to §402(b). Pp. 14–15.

(b) While a later enacted statute (such as the ESA) can some

times operate to amend or even repeal an earlier statutory provision

(such as the CWA), “repeals by implication are not favored” and will

not be presumed unless the legislature’s intention “to repeal [is] clear

and manifest.” Watt v. Alaska, 451 U. S. 259, 267. Statutory repeal

will not be inferred “unless the later statute ‘ “expressly contradict[s]

the original act” ’ or such a construction ‘ “is absolutely necessary [to

give the later statute’s words] any meaning at all.” ’ ” Traynor v.

Turnage, 485 U. S. 535, 548. Otherwise, “a statute dealing with a

narrow, precise, and specific subject is not submerged by a later en

acted statute covering a more generalized spectrum.” Radzanower v.

Touche Ross & Co., 426 U. S. 148, 153. The Ninth Circuit’s reading

of §7(a)(2) would effectively repeal §402(b)’s mandate that the EPA

“shall” issue a permit whenever all nine exclusive statutory prerequi

sites are met. Section 402(b) does not just set minimum require

ments; it affirmatively mandates a transfer’s approval, thus operat

ing as a ceiling as well as a floor. By adding an additional criterion,

the Ninth Circuit raises that floor and alters the statute’s command.

Read broadly, the Ninth Circuit’s construction would also partially

override every federal statute mandating agency action by subjecting

such action to the further condition that it not jeopardize listed spe

cies. Pp. 15–17.

(c) Title 50 CFR §402.03, promulgated by the NMFS and FWS

and applying §7(a)(2) “to all actions in which there is discretionary

Federal involvement or control” (emphasis added), harmonizes the

CWA and ESA by giving effect to the ESA’s no-jeopardy mandate

whenever an agency has discretion to do so, but not when the agency

4 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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is forbidden from considering such extrastatutory factors. The Court

owes “some degree of deference to the Secretary’s reasonable inter

pretation” of the ESA, Babbitt v. Sweet Home Chapter, Communities

for Great Ore., 515 U. S. 687, 703. Deference is not due if Congress

has made its intent “clear” in the statutory text, Chevron U. S. A. Inc.

v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842, but “if

the statute is silent or ambiguous . . . the question . . . is whether the

agency’s answer is based on a permissible construction of the stat

ute,” id., at 843. Because the “meaning—or ambiguity—of certain

words or phrases may only become evident . . . in context,” FDA v.

Brown & Williamson Tobacco Corp., 529 U. S. 120, 132, §7(a)(2) must

be read against the statutory backdrop of the many mandatory

agency directives whose operation it would implicitly abrogate or re

peal were it construed as broadly as the Ninth Circuit did below.

Such a reading leaves a fundamental ambiguity. An agency cannot

simultaneously obey the differing mandates of ESA §7(a)(2) and CWA

§402(b), and consequently the statutory language—read in light of

the canon against implied repeals—does not itself provide clear guid

ance as to which command must give way. Thus, it is appropriate to

look to the implementing agency’s expert interpretation, which har

monizes the statutes by applying §7(a)(2) to guide agencies’ existing

discretionary authority, but not reading it to override express statu

tory mandates. This interpretation is reasonable in light of the stat

ute’s text and the overall statutory scheme and is therefore entitled

to Chevron deference. The regulation’s focus on “discretionary” ac

tions accords with the commonsense conclusion that, when an agency

is required to do something by statute, it simply lacks the power to

“insure” that such action will not jeopardize listed species. The basic

principle of Department of Transportation v. Public Citizen, 541 U. S.

752—that an agency cannot be considered the legal “cause” of an ac

tion that it has no statutory discretion not to take, id., at 770—

supports the reasonableness of the FWS’s interpretation. Pp. 17–22.

(d) Respondents’ contrary position is not supported by TVA v.

Hill, 437 U. S. 153, which had no occasion to answer the question

presented in these cases. Pp. 22–24.

(e) Also unavailing is the argument that EPA’s decision to trans

fer NPDES permitting authority to Arizona represented a “discre

tionary” agency action. While the EPA may exercise some judgment

in determining whether a State has shown that it can carry out

§402(b)’s enumerated criteria, the statute clearly does not grant it

the discretion to add another entirely separate prerequisite to that

list. Nothing in §402(b) authorizes the EPA to consider the protec

tion of listed species as an end in itself when evaluating a transfer

application. And to the extent that some of §402(b)’s criteria may re

Cite as: 551 U. S. ____ (2007) 5

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sult in environmental benefits to marine species, Arizona has satis

fied each of those criteria. Respondents’ argument has also been dis

claimed by the FWS and the NMFS, the agencies primarily charged

with administering §7(a)(2) and the drafters of the regulations im

plementing that section. Pp. 24–25.

420 F. 3d 946, reversed and remanded.

ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J.,

and SCALIA, KENNEDY, and THOMAS, JJ., joined. STEVENS, J., filed a dis

senting opinion, in which SOUTER, GINSBURG, and BREYER, JJ., joined.

BREYER, J., filed a dissenting opinion.

Cite as: 551 U. S. ____ (2007) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the

preliminary print of the United States Reports. Readers are requested to

notify the Reporter of Decisions, Supreme Court of the United States, Wash

ington, D. C. 20543, of any typographical or other formal errors, in order

that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES

_________________

Nos. 06–340 and 06–549

_________________

NATIONAL ASSOCIATION OF HOME BUILDERS,

ET AL., PETITIONERS

06–340 v.

DEFENDERS OF WILDLIFE ET AL.

ENVIRONMENTAL PROTECTION AGENCY,

PETITIONER

06–549 v.

DEFENDERS OF WILDLIFE ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[June 25, 2007]

JUSTICE ALITO delivered the opinion of the Court.

These cases concern the interplay between two federal

environmental statutes. Section 402(b) of the Clean Water

Act requires that the Environmental Protection Agency

transfer certain permitting powers to state authorities

upon an application and a showing that nine specified

criteria have been met. Section 7(a)(2) of the Endangered

Species Act of 1973 provides that a federal agency must

consult with agencies designated by the Secretaries of

Commerce and the Interior in order to “insure that any

action authorized, funded, or carried out by such agency

. . . is not likely to jeopardize the continued existence of

any endangered species or threatened species.” The ques

tion presented is whether §7(a)(2) effectively operates as a

2 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

tenth criterion on which the transfer of permitting power

under the first statute must be conditioned. We conclude

that it does not. The transfer of permitting authority to

state authorities—who will exercise that authority under

continuing federal oversight to ensure compliance with

relevant mandates of the Endangered Species Act and

other federal environmental protection statutes—was

proper. We therefore reverse the judgment of the United

States Court of Appeals for the Ninth Circuit.

I

A

1

The Clean Water Act of 1972 (CWA), 86 Stat. 816, 33

U. S. C. §1251 et seq., established a National Pollution

Discharge Elimination System (NPDES) that is designed

to prevent harmful discharges into the Nation’s waters.

The Environmental Protection Agency (EPA) initially

administers the NPDES permitting system for each State,

but a State may apply for a transfer of permitting author

ity to state officials. See 33 U. S. C. §1342; see also

§1251(b) (“It is the policy of Congress that the Stat[e] . . .

implement the permit progra[m] under sectio[n] 1342 . . .

of this title”). If authority is transferred, then state offi

cials—not the federal EPA—have the primary responsibil

ity for reviewing and approving NPDES discharge per

mits, albeit with continuing EPA oversight.1

Under §402(b) of the CWA, “the Governor of each State

desiring to administer its own permit program for dis

charges into navigable waters within its jurisdiction may

submit to [the EPA] a full and complete description of the

——————

1 The State must advise the EPA of each permit it proposes to issue,

and the EPA may object to any permit. 33 U. S. C. §§1342(d)(1), (2); see

also 40 CFR §123.44(c) (2006). If the State cannot address the EPA’s

concerns, authority over the permit reverts to the EPA. 33 U. S. C.

§1342(d)(4).

Cite as: 551 U. S. ____ (2007) 3

Opinion of the Court

program it proposes to establish and administer under

State law or under an interstate compact,” as well as a

certification “that the laws of such State . . . provide ade

quate authority to carry out the described program.” 33

U. S. C. §1342(b). The same section provides that the EPA

“shall approve each submitted program” for transfer of

permitting authority to a State “unless [it] determines

that adequate authority does not exist” to ensure that nine

specified criteria are satisfied. Ibid. These criteria all

relate to whether the state agency that will be responsible

for permitting has the requisite authority under state law

to administer the NPDES program.2 If the criteria are

met, the transfer must be approved.

2

The Endangered Species Act of 1973 (ESA), 87 Stat.

884, as amended, 16 U. S. C. §1531 et seq., is intended to

protect and conserve endangered and threatened species

and their habitats. Section 4 of the ESA directs the Secre

taries of Commerce and the Interior to list threatened and

——————

2 The State must demonstrate that it has the ability: (1) to issue

fixed-term permits that apply and ensure compliance with the CWA’s

substantive requirements and which are revocable for cause; (2) to

inspect, monitor, and enter facilities and to require reports to the

extent required by the CWA; (3) to provide for public notice and public

hearings; (4) to ensure that the EPA receives notice of each permit

application; (5) to ensure that any other State whose waters may be

affected by the issuance of a permit may submit written recommenda

tions and that written reasons be provided if such recommendations are

not accepted; (6) to ensure that no permit is issued if the Army Corps of

Engineers concludes that it would substantially impair the anchoring

and navigation of navigable waters; (7) to abate violations of permits or

the permit program, including through civil and criminal penalties; (8)

to ensure that any permit for a discharge from a publicly owned treat

ment works includes conditions requiring the identification of the type

and volume of certain pollutants; and (9) to ensure that any industrial

user of any publicly owned treatment works will comply with certain of

the CWA’s substantive provisions. §§1342(b)(1)–(9).

4 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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endangered species and to designate their critical habi

tats. §1533. The Fish and Wildlife Service (FWS) admin

isters the ESA with respect to species under the jurisdic

tion of the Secretary of the Interior, while the National

Marine Fisheries Service (NMFS) administers the ESA

with respect to species under the jurisdiction of the Secre

tary of Commerce. See 50 CFR §§17.11, 222.101(a),

223.102, 402.01(b) (2006).

Section 7 of the ESA prescribes the steps that federal

agencies must take to ensure that their actions do not

jeopardize endangered wildlife and flora. Section 7(a)(2)

provides that “[e]ach Federal agency shall, in consultation

with and with the assistance of the Secretary [of Com

merce or the Interior], insure that any action authorized,

funded, or carried out by such agency (hereinafter in this

section referred to as an ‘agency action’) is not likely to

jeopardize the continued existence of any endangered

species or threatened species.” 16 U. S. C. §1536(a)(2).

Once the consultation process contemplated by §7(a)(2)

has been completed, the Secretary is required to give the

agency a written biological opinion “setting forth the

Secretary’s opinion, and a summary of the information on

which the opinion is based, detailing how the agency

action affects the species or its critical habitat.”

§1536(b)(3)(A); see also 50 CFR §402.14(h). If the Secre

tary concludes that the agency action would place the

listed species in jeopardy or adversely modify its critical

habitat, “the Secretary shall suggest those reasonable and

prudent alternatives which he believes would not violate

[§7(a)(2)] and can be taken by the Federal agency . . . in

implementing the agency action.” 16 U. S. C.

§1536(b)(3)(A); see also 50 CFR §402.14(h)(3). Regulations

promulgated jointly by the Secretaries of Commerce and

the Interior provide that, in order to qualify as a “reason

able and prudent alternative,” an alternative course of

action must be able to be implemented in a way “consis

Cite as: 551 U. S. ____ (2007) 5

Opinion of the Court

tent with the scope of the Federal agency’s legal authority

and jurisdiction.” §402.02. Following the issuance of a

“jeopardy” opinion, the agency must either terminate the

action, implement the proposed alternative, or seek an

exemption from the Cabinet-level Endangered Species

Committee pursuant to 16 U. S. C. §1536(e). The regula

tions also provide that “Section 7 and the requirements of

this part apply to all actions in which there is discretion

ary Federal involvement or control.” 50 CFR §402.03.

B

1

In February 2002, Arizona officials applied for EPA

authorization to administer that State’s NPDES program.3

The EPA initiated consultation with the FWS to deter

mine whether the transfer of permitting authority would

adversely affect any listed species.

The FWS regional office concluded that the transfer of

authority would not cause any direct impact on water

quality that would adversely affect listed species. App. to

Pet. for Cert. in No. 06–340, p. 564. However, the FWS

office was concerned that the transfer could result in the

issuance of more discharge permits, which would lead to

more development, which in turn could have an indirect

adverse effect on the habitat of certain upland species,

such as the cactus ferruginous pygmy-owl and the Pima

pineapple cactus. Specifically, the FWS feared that, be

cause §7(a)(2)’s consultation requirement does not apply to

permitting decisions by state authorities,4 the transfer of

authority would empower Arizona officials to issue indi

vidual permits without considering and mitigating their

——————

3 At the time when Arizona applied, the EPA had already transferred

permitting authority to local authorities in 44 other States and several

United States Territories.

4 By its terms, §7(a)(2)’s consultation requirement applies only to

“action[s] authorized, funded, or carried out” by “Federal agenc[ies].”

6 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

indirect impact on these upland species. Id., at 565–566.

The FWS regional office therefore urged that, in consider

ing the proposed transfer of permitting authority, those

involved in the consultation process should take these

potential indirect impacts into account.

The EPA disagreed, maintaining that “its approval

action, which is an administrative transfer of authority,

[would not be] the cause of future non-discharge-related

impacts on endangered species from projects requiring

State NPDES permits.” Id., at 564. As a factual matter,

the EPA believed that the link between the transfer of

permitting authority and the potential harm that could

result from increased development was too attenuated.

Id., at 654. And as a legal matter, the EPA concluded that

the mandatory nature of CWA §402(b)—which directs that

the EPA “shall approve” a transfer request if that section’s

nine statutory criteria are met—stripped it of authority to

disapprove a transfer based on any other considerations.

Id., at 654–655.

Pursuant to procedures set forth in a memorandum of

understanding between the agencies, the dispute was

referred to the agencies’ national offices for resolution. In

December 2002, the FWS issued its biological opinion,

which concluded that the requested transfer would not

cause jeopardy to listed species. The opinion reasoned

that “the loss of section 7-related conservation benefits . . .

is not an indirect effect of the authorization action,” id., at

117, because

“loss of any conservation benefit is not caused by

EPA’s decision to approve the State of Arizona’s pro

gram. Rather, the absence of the section 7 process

that exists with respect to Federal NPDES permits re

flects Congress’ decision to grant States the right to

administer these programs under state law provided

the State’s program meets the requirements of

Cite as: 551 U. S. ____ (2007) 7

Opinion of the Court

[§]402(b) of the Clean Water Act.” Id., at 114.

In addition, the FWS opined that the EPA’s continuing

oversight of Arizona’s permitting program, along with

other statutory protections, would adequately protect

listed species and their habitats following the transfer.

Id., at 101–107.

The EPA concluded that Arizona had met each of the

nine statutory criteria listed in §402(b) and approved the

transfer of permitting authority. In the notice announcing

the approval of the transfer, the EPA noted that the issu

ance of the FWS’s biological opinion had “conclude[d] the

consultation process required by ESA section 7(a)(2) and

reflects the [FWS’] agreement with EPA that the approval

of the State program meets the substantive requirements

of the ESA.” Id., at 73.

2

On April 2, 2003, respondents filed a petition in the

United States Court of Appeals for the Ninth Circuit

seeking review of the transfer pursuant to 33 U. S. C.

§1369(b)(1)(D), which allows private parties to seek direct

review of the EPA’s determinations regarding state per

mitting programs in the federal courts of appeals. The

court granted petitioner National Association of Home-

builders leave to intervene as a respondent in that case.

Respondent Defenders of Wildlife also filed a separate

action in the United States District Court for the District

of Arizona, alleging, among other things, that the biologi

cal opinion issued by the FWS in support of the proposed

transfer did not comply with the ESA’s standards. The

District Court severed that claim and transferred it to the

Court of Appeals for the Ninth Circuit, which consolidated

the case with the suit challenging the EPA transfer. See

420 F. 3d 946 (2005).

A divided panel of the Ninth Circuit held that the EPA’s

approval of the transfer was arbitrary and capricious

8 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

because the EPA “relied during the administrative pro

ceedings on legally contradictory positions regarding its

section 7 obligations.” Id., at 959. The court concluded

that the EPA “fail[ed] to understand its own authority

under section 7(a)(2) to act on behalf of listed species and

their habitat,” id., at 977, because “the two propositions

that underlie the EPA’s action—that (1) it must, under the

[ESA], consult concerning transfers of CWA permitting

authority, but (2) it is not permitted, as a matter of law, to

take into account the impact on listed species in making

the transfer decision—cannot both be true,” id., at 961.

The court therefore concluded that it was required to

“remand to the agency for a plausible explanation of its

decision, based on a single, coherent interpretation of the

statute.” Id., at 962.

The panel majority, however, did not follow this course

of action. Rather, the panel went on to review the EPA’s

substantive construction of the statutes at issue and held

that the ESA granted the EPA both the power and the

duty to determine whether its transfer decision would

jeopardize threatened or endangered species. The panel

did not dispute that Arizona had met the nine criteria set

forth in §402(b) of the CWA, but the panel nevertheless

concluded that §7(a)(2) of the ESA provided an “affirma

tive grant of authority to attend to [the] protection of

listed species,” id., at 965, in effect adding a tenth crite

rion to those specified in §402(b). The panel dismissed the

argument that the EPA’s approval of the transfer applica

tion was not subject to §7(a)(2) because it was not a “dis

cretionary action” within the meaning of 50 CFR §402.03

(interpreting §7(a)(2) to apply only to agency actions “in

which there is discretionary Federal involvement and

control”). 420 F. 3d, at 967–969. It viewed the FWS’s

regulation as merely “coterminous” with the express

statutory language encompassing all agency actions that

are “ ‘authorized, funded, or carried out’ ” by the agency.

Cite as: 551 U. S. ____ (2007) 9

Opinion of the Court

Id., at 969 (quoting 16 U. S. C. §1536(a)(2)). On these

grounds, the court granted the petition and vacated the

EPA’s transfer decision.

In dissent, Judge Thompson explained that the transfer

decision was not a “discretionary action” under 50 CFR

§402.03 because “[t]he Clean Water Act, by its very terms,

permits the EPA to consider only the nine specified fac

tors. If a state’s proposed permitting program meets the

enumerated requirements,” he reasoned, “the EPA admin

istrator ‘shall approve’ the program. 33 U. S. C. §1342(b).

This [c]ongressional directive does not permit the EPA to

impose additional conditions.” 420 F. 3d, at 980.

The Ninth Circuit denied rehearing and rehearing en

banc. 450 F. 3d 394 (2006). Writing for the six judges who

dissented from the denial of rehearing en banc, Judge

Kozinski disagreed with the panel’s conclusion that the

EPA’s analysis was so internally inconsistent as to be

arbitrary and capricious. He further noted that, if the

panel was correct on this point, the proper resolution

would have been to remand to the EPA for further expla

nation. Id., at 396–398. On the statutory question, Judge

Kozinski echoed Judge Thompson’s conclusion that once

the nine criteria set forth in §402(b) of the CWA are satis

fied, a transfer is mandatory and nondiscretionary. Id., at

397–399. He rejected the panel majority’s broad construc

tion of ESA §7(a)(2), concluding that “[i]f the ESA were as

powerful as the majority contends, it would modify not

only the EPA’s obligation under the CWA, but every cate

gorical mandate applicable to every federal agency.” Id., at

399, n. 4.

The Ninth Circuit’s construction of §7(a)(2) is at odds

with that of other Courts of Appeals. Compare 420 F. 3d

946 (case below), with Platte River Whooping Crane Criti

cal Habitat Maintenance Trust v. FERC, 962 F. 2d 27, 33–

34 (CADC 1992), and American Forest & Paper Associa

tion v. EPA, 137 F. 3d 291, 298–299 (CA5 1998). We

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Opinion of the Court

granted certiorari to resolve this conflict, 549 U. S. ___

(2007), and we now reverse.

II

Before addressing this question of statutory interpreta

tion, however, we first consider whether the Court of

Appeals erred in holding that the EPA’s transfer decision

was arbitrary and capricious because, in that court’s

words, the agencies involved in the decision “relied . . . on

legally contradictory positions regarding [their] section 7

obligations.” App. to Pet. for Cert. in No. 06–340, at 23.

As an initial matter, we note that if the EPA’s action

was arbitrary and capricious, as the Ninth Circuit held,

the proper course would have been to remand to the

agency for clarification of its reasons. See Gonzales v.

Thomas, 547 U. S. 183 (2006) (per curiam). Indeed, the

court below expressly recognized that this finding required

it to “remand to the agency for a plausible explanation of

its decision, based on a single, coherent interpretation of

the statute.” App. to Pet. for Cert. in No. 06–340, at 28.

But the Ninth Circuit did not take this course; instead, it

jumped ahead to resolve the merits of the dispute. In so

doing, it erroneously deprived the agency of its usual

administrative avenue for explaining and reconciling the

arguably contradictory rationales that sometimes appear

in the course of lengthy and complex administrative deci

sions. We need not examine this question further, how

ever, because we conclude that the Ninth Circuit’s deter

mination that the EPA’s action was arbitrary and

capricious is not fairly supported by the record.

Review under the arbitrary and capricious standard is

deferential; we will not vacate an agency’s decision unless

it

“has relied on factors which Congress had not in

tended it to consider, entirely failed to consider an

important aspect of the problem, offered an explana

Cite as: 551 U. S. ____ (2007) 11

Opinion of the Court

tion for its decision that runs counter to the evidence

before the agency, or is so implausible that it could

not be ascribed to a difference in view or the product

of agency expertise.” Motor Vehicle Mfrs. Assn. of

United States, Inc. v. State Farm Mut. Automobile Ins.

Co., 463 U. S. 29, 43 (1983).

“We will, however, ‘uphold a decision of less than ideal

clarity if the agency’s path may reasonably be discerned.’ ”

Ibid. (quoting Bowman Transp., Inc. v. Arkansas-Best

Freight System, Inc., 419 U. S. 281, 286 (1974)).

The Court of Appeals concluded that the EPA’s decision

was “internally inconsistent” because, in its view, the

agency stated—both during preliminary review of Ari

zona’s transfer application and in the Federal Register

notice memorializing its final action—“that section 7

requires consultation regarding the effect of a permitting

transfer on listed species.” App. to Pet. for Cert. in No.

06–340, at 23.

With regard to the various statements made by the

involved agencies’ regional offices during the early stages

of consideration, the only “inconsistency” respondents can

point to is the fact that the agencies changed their

minds—something that, as long as the proper procedures

were followed, they were fully entitled to do. The federal

courts ordinarily are empowered to review only an

agency’s final action, see 5 U. S. C. §704, and the fact that

a preliminary determination by a local agency representa

tive is later overruled at a higher level within the agency

does not render the decisionmaking process arbitrary and

capricious.

Respondents also point to the final Federal Register

notice memorializing the EPA’s approval of Arizona’s

transfer application. This notice stated that the FWS’s

issuance of its biological opinion had “conclude[d] the

consultation process required by ESA section 7(a)(2).”

12 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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App. to Pet. for Cert. in No. 06–340, at 73. Respondents

contend that this statement is inconsistent with the EPA’s

previously expressed position—and their position

throughout this litigation—that §7(a)(2)’s consultation

requirement is not triggered by a transfer application

under §402 of the CWA.

We are not persuaded that this statement constitutes

the type of error that requires a remand. By the time the

Federal Register statement was issued, the EPA had

already consulted with the FWS about the Arizona appli

cation, and the question whether that consultation had

been required, as opposed to voluntarily undertaken by

the agency, was simply not germane to the final agency

transfer decision. The Federal Register statement, in

short, was dictum, and it had no bearing on the final

agency action that respondents challenge. Mindful of

Congress’ admonition that in reviewing agency action,

“due account shall be taken of the rule of prejudicial er

ror,” 5 U. S. C. §706, we do not believe that this stray

statement, which could have had no effect on the underly

ing agency action being challenged, requires that we

further delay the transfer of permitting authority to Ari

zona by remanding to the agency for clarification. See also

PDK Labs., Inc. v. United States Drug Enforcement

Admin., 362 F. 3d 786, 799 (CADC 2004) (“In administra

tive law, as in federal civil and criminal litigation, there is

a harmless error rule”).5

——————

5 We also note that the agencies involved have resolved any ambigu

ity in their positions going forward. Following the issuance of the

panel’s opinion below, the EPA—in connection with the State of

Alaska’s pending application for transfer of NPDES permitting author

ity—requested confirmation from the FWS and NMFS of the EPA’s

position that “the no-jeopardy and consultation duties of ESA Section

7(a)(2) do not apply to approval of a State’s application to administer

the NPDES program,” in the apparent hope that obtaining those

agencies’ views “in advance of processing Alaska’s application may

avoid a repetition of” the confusion that occurred during the Arizona

Cite as: 551 U. S. ____ (2007) 13

Opinion of the Court

We further disagree with respondents’ suggestion that,

by allegedly altering its legal position while the Arizona

transfer decision and its associated litigation was pending,

the “EPA is effectively nullifying respondents’ rights to

participate in administrative proceedings concerning

Arizona’s application, and particularly respondents’ rights

under EPA’s own regulations to comment on NPDES

transfer applications.” Brief for Respondents 28 (citing 40

CFR §123.61(b); emphasis deleted). Consistent with EPA

regulations, the agency made available “a comment period

of not less than 45 days during which interested members

of the public [could] express their views on the State pro

gram.” §123.61(a)(1). Respondents do not suggest that

they were deprived of their right to comment during this

period.6

Respondents also contend that if the case were re

manded to the EPA, they would raise additional chal

lenges—including, for example, a challenge to the EPA’s

provision of financial assistance to Arizona for the admini

stration of its NPDES program. However, as explained

below, any such agency action is separate and independ

ent of the agency’s decision to authorize the transfer of

——————

permitting process. App. to Pet. for Cert. in No. 06–549, at 96a, 95a. In

response, both the FWS and the NMFS confirmed their understanding

that “there is no need to conduct Section 7 consultations on proposed

actions to approve State NPDES programs because such actions are not

the cause of any impact on listed species and do not constitute discre

tionary federal agency actions to which Section 7 applies.” Id., at 107a;

see also id., at 116a (NMFS “concur[s] with EPA’s conclusion that EPA

is not required to engage in section 7 consultation on applications to

approve State programs in situations under Section 402(b) of the

CWA”).

6 Nor is there any independent right to public comment with regard to

consultations conducted under §7(a)(2)—a consultation process that we

conclude, in any case, was not required here. See 51 Fed. Reg. 19928

(1986) (“Nothing in section 7 authorizes or requires the Service to

provide for public involvement (other than that of the applicant) in the

‘interagency’ consultation process”).

14 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

permitting authority pursuant to §402(b). See n. 11, infra.

We express no opinion as to the viability of a separate

administrative or legal challenge to such actions.

III

A

We turn now to the substantive statutory question

raised by the petitions, a question that requires us to

mediate a clash of seemingly categorical—and, at first

glance, irreconcilable—legislative commands. Section

402(b) of the CWA provides, without qualification, that the

EPA “shall approve” a transfer application unless it de

termines that the State lacks adequate authority to per

form the nine functions specified in the section. 33

U. S. C. §1342(b). By its terms, the statutory language is

mandatory and the list exclusive; if the nine specified

criteria are satisfied, the EPA does not have the discretion

to deny a transfer application. Cf. Lopez v. Davis, 531

U. S. 230, 241 (2001) (noting Congress’ “use of a manda

tory ‘shall’ . . . to impose discretionless obligations”); Lexe

con Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523

U. S. 26, 35 (1998) (“[T]he mandatory ‘shall’ . . . normally

creates an obligation impervious to judicial discretion”);

Association of Civil Technicians v. FLRA, 22 F. 3d 1150,

1153 (CADC 1994) (“The word ‘shall’ generally indicates a

command that admits of no discretion on the part of the

person instructed to carry out the directive”); Black’s Law

Dictionary 1375 (6th ed. 1990) (“As used in statutes . . .

this word is generally imperative or mandatory”). Neither

respondents nor the Ninth Circuit has ever disputed that

Arizona satisfied each of these nine criteria. See 420

F. 3d, at 963, n. 11; Brief for Respondents 19, n. 8.

The language of §7(a)(2) of the ESA is similarly impera

tive: it provides that “[e]ach Federal agency shall, in con

sultation with and with the assistance of the Secretary,

insure that any action authorized, funded, or carried out

Cite as: 551 U. S. ____ (2007) 15

Opinion of the Court

by such agency . . . is not likely to jeopardize” endangered

or threatened species or their habitats. 16 U. S. C.

§1536(a)(2). This mandate is to be carried out through

consultation and may require the agency to adopt an

alternative course of action. As the author of the panel

opinion below recognized, applying this language literally

would “ad[d] one [additional] requirement to the list of

considerations under the Clean Water Act permitting

transfer provision.” 450 F. 3d, at 404, n. 2 (Berzon, J.,

concurring in denial of rehearing en banc) (emphasis in

original). That is, it would effectively repeal the manda

tory and exclusive list of criteria set forth in §402(b), and

replace it with a new, expanded list that includes §7(a)(2)’s

no-jeopardy requirement.

B

While a later enacted statute (such as the ESA) can

sometimes operate to amend or even repeal an earlier

statutory provision (such as the CWA), “repeals by impli

cation are not favored” and will not be presumed unless

the “intention of the legislature to repeal [is] clear and

manifest.” Watt v. Alaska, 451 U. S. 259, 267 (1981) (in

ternal quotation marks omitted). We will not infer a

statutory repeal “unless the later statute ‘ “expressly

contradict[s] the original act” ’ or unless such a construc

tion ‘ “is absolutely necessary . . . in order that [the] words

[of the later statute] shall have any meaning at all.” ’ ”

Traynor v. Turnage, 485 U. S. 535, 548 (1988) (quoting

Radzanower v. Touche Ross & Co., 426 U. S. 148, 153

(1976), in turn quoting T. Sedgwick, The Interpretation

and Construction of Statutory and Constitutional Law 98

(2d ed. 1874)); see also Branch v. Smith, 538 U. S. 254,

273 (2003) (“An implied repeal will only be found where

provisions in two statutes are in ‘irreconcilable conflict,’ or

where the latter Act covers the whole subject of the earlier

one and ‘is clearly intended as a substitute’ ”); Posadas v.

16 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

National City Bank, 296 U. S. 497, 503 (1936) (“[T]he

intention of the legislature to repeal must be clear and

manifest”). Outside these limited circumstances, “a stat

ute dealing with a narrow, precise, and specific subject is

not submerged by a later enacted statute covering a more

generalized spectrum.” Radzanower, supra, at 153.

Here, reading §7(a)(2) as the Court of Appeals did would

effectively repeal §402(b)’s statutory mandate by engraft

ing a tenth criterion onto the CWA.7 Section 402(b) of the

CWA commands that the EPA “shall” issue a permit

whenever all nine exclusive statutory prerequisites are

met. Thus, §402(b) does not just set forth minimum re

quirements for the transfer of permitting authority; it

affirmatively mandates that the transfer “shall” be ap

proved if the specified criteria are met. The provision

operates as a ceiling as well as a floor. By adding an

additional criterion, the Ninth Circuit’s construction of

§7(a)(2) raises that floor and alters §402(b)’s statutory

command.8

——————

7 JUSTICE STEVENS’ dissenting opinion attempts to paper over this

conflict by suggesting that the EPA and the agencies designated by the

Secretary of the Interior could reconcile the commands of the CWA and

the ESA by “generat[ing] an alternative course of action whereby the

transfer could still take place . . . but in such a way that would honor

the mandatory requirements of §7(a)(2).” Post, at 15. For example, it

suggests that the EPA could condition transfers of permitting authority

on the State’s acceptance of additional continuing oversight by the EPA

(presumably beyond that oversight already contemplated by the CWA’s

statutory language). Post, at 17–19. But such a take-it-or-leave-it

approach, no less than a straightforward rejection of a transfer applica

tion, would impose conditions on an NPDES transfer beyond those set

forth in §402(b), and thus alter the CWA’s statutory command.

8 It does not matter whether this alteration is characterized as an

amendment or a partial repeal. Every amendment of a statute effects a

partial repeal to the extent that the new statutory command displaces

earlier, inconsistent commands, and we have repeatedly recognized

that implied amendments are no more favored than implied repeals.

See, e.g., Regional Rail Reorganization Act Cases, 419 U. S. 102, 134

Cite as: 551 U. S. ____ (2007) 17

Opinion of the Court

The Ninth Circuit’s reading of §7(a)(2) would not only

abrogate §402(b)’s statutory mandate, but also result in

the implicit repeal of many additional otherwise categori

cal statutory commands. Section 7(a)(2) by its terms

applies to “any action authorized, funded, or carried out

by” a federal agency—covering, in effect, almost anything

that an agency might do. Reading the provision broadly

would thus partially override every federal statute man

dating agency action by subjecting such action to the

further condition that it pose no jeopardy to endangered

species. See, e.g., Platte River Whooping Crane Critical

Habitat Maintenance Trust v. FERC, 962 F. 2d, at 33–34

(considering whether §7(a)(2) overrides the Federal Power

Act’s prohibition on amending annual power licenses).

While the language of §7(a)(2) does not explicitly repeal

any provision of the CWA (or any other statute), reading it

for all that it might be worth runs foursquare into our

presumption against implied repeals.

C

1

The agencies charged with implementing the ESA have

attempted to resolve this tension through regulations

implementing §7(a)(2). The NMFS and FWS, acting

jointly on behalf of the Secretaries of Commerce and the

Interior and following notice-and-comment rulemaking

procedures, have promulgated a regulation stating that

“Section 7 and the requirements of this part apply to all

——————

(1974) (“ ‘A new statute will not be read as wholly or even partially

amending a prior one unless there exists a ‘positive repugnancy’ be

tween the provisions of the new and those of the old that cannot be

reconciled’ ”) (quoting In re Penn Central Transportation Co., 384

F. Supp. 895, 943 (Sp. Ct. R. R. R. A. 1974)); United States v. Welden,

377 U. S. 95, 103, n. 12 (1964) (“Amendments by implication . . . are not

favored”); United States v. Madigan, 300 U. S. 500, 506 (1937) (“[T]he

modification by implication of the settled construction of an earlier and

different section is not favored”).

18 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

actions in which there is discretionary Federal involve

ment or control.” 50 CFR §402.03 (emphasis added).

Pursuant to this regulation, §7(a)(2) would not be read as

impliedly repealing nondiscretionary statutory mandates,

even when they might result in some agency action.

Rather, the ESA’s requirements would come into play only

when an action results from the exercise of agency discre

tion. This interpretation harmonizes the statutes by

giving effect to the ESA’s no-jeopardy mandate whenever

an agency has discretion to do so, but not when the agency

is forbidden from considering such extrastatutory factors.

We have recognized that “[t]he latitude the ESA gives

the Secretary in enforcing the statute, together with the

degree of regulatory expertise necessary to its enforce

ment, establishes that we owe some degree of deference to

the Secretary’s reasonable interpretation” of the statutory

scheme. Babbitt v. Sweet Home Chapter, Communities for

Great Ore., 515 U. S. 687, 703 (1995). But such deference

is appropriate only where “Congress has not directly ad

dressed the precise question at issue” through the statu

tory text. Chevron U. S. A. Inc. v. Natural Resources

Defense Council, Inc., 467 U. S. 837, 843 (1984).

“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 to the unambiguously expressed intent of

Congress. . . . [However,] if the statute is silent or am

biguous with respect to the specific issue, the question

for the court is whether the agency’s answer is based

on a permissible construction of the statute.” Id., at

842–843 (footnotes omitted).

In making the threshold determination under Chevron,

“a reviewing court should not confine itself to examining a

particular statutory provision in isolation.” FDA v. Brown

& Williamson Tobacco Corp., 529 U. S. 120, 132 (2000).

Rather, “[t]he meaning—or ambiguity—of certain words or

Cite as: 551 U. S. ____ (2007) 19

Opinion of the Court

phrases may only become evident when placed in con

text. . . . It is a ‘fundamental canon of statutory construc

tion that the words of a statute must be read in their

context and with a view to their place in the overall statu

tory scheme.’ ” Id., at 132–133 (quoting Davis v. Michigan

Dept. of Treasury, 489 U. S. 803, 809 (1989)).

We must therefore read §7(a)(2) of the ESA against the

statutory backdrop of the many mandatory agency direc

tives whose operation it would implicitly abrogate or

repeal if it were construed as broadly as the Ninth Circuit

did below. When §7(a)(2) is read this way, we are left with

a fundamental ambiguity that is not resolved by the statu

tory text. An agency cannot simultaneously obey the

differing mandates set forth in §7(a)(2) of the ESA and

§402(b) of the CWA, and consequently the statutory lan

guage—read in light of the canon against implied re

peals—does not itself provide clear guidance as to which

command must give way.

In this situation, it is appropriate to look to the imple

menting agency’s expert interpretation, which cabins

§7(a)(2)’s application to “actions in which there is discre

tionary Federal involvement or control.” 50 CFR §402.03.

This reading harmonizes the statutes by applying §7(a)(2)

to guide agencies’ existing discretionary authority, but not

reading it to override express statutory mandates.

2

We conclude that this interpretation is reasonable in

light of the statute’s text and the overall statutory scheme,

and that it is therefore entitled to deference under Chev

ron. Section 7(a)(2) requires that an agency “insure” that

the actions it authorizes, funds, or carries out are not

likely to jeopardize listed species or their habitats. To

“insure” something—as the court below recognized—

means “ ‘[t]o make certain, to secure, to guarantee (some

thing, event, etc.).’ ” 420 F. 3d, at 963 (quoting 7 Oxford

20 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

English Dictionary 1059 (2d ed. 1989)). The regulation’s

focus on “discretionary” actions accords with the common

sense conclusion that, when an agency is required to do

something by statute, it simply lacks the power to “insure”

that such action will not jeopardize endangered species.

This reasoning is supported by our decision in Depart

ment of Transportation v. Public Citizen, 541 U. S. 752

(2004). That case concerned safety regulations that were

promulgated by the Federal Motor Carrier Safety Admini

stration (FMCSA) and had the effect of triggering a Presi

dential directive allowing Mexican trucks to ply their

trade on United States roads. The Court held that the

National Environmental Policy Act (NEPA) did not re

quire the agency to assess the environmental effects of

allowing the trucks entry because “the legally relevant

cause of the entry of the Mexican trucks is not FMCSA’s

action, but instead the actions of the President in lifting

the moratorium and those of Congress in granting the

President this authority while simultaneously limiting

FMCSA’s discretion.” Id., at 769 (emphasis in original).

The Court concluded that “where an agency has no ability

to prevent a certain effect due to its limited statutory

authority over the relevant actions, the agency cannot be

considered a legally relevant ‘cause’ of the effect.” Id., at

770.

We do not suggest that Public Citizen controls the out

come here; §7(a)(2), unlike NEPA, imposes a substantive

(and not just a procedural) statutory requirement, and

these cases involve agency action more directly related to

environmental concerns than the FMCSA’s truck safety

regulations. But the basic principle announced in Public

Citizen—that an agency cannot be considered the legal

“cause” of an action that it has no statutory discretion not

to take—supports the reasonableness of the FWS’s inter

pretation of §7(a)(2) as reaching only discretionary agency

actions. See also California v. United States, 438 U. S.

Cite as: 551 U. S. ____ (2007) 21

Opinion of the Court

645, 668, n. 21 (1978) (holding that a statutory require

ment that federal operating agencies conform to state

water usage rules applied only to the extent that it was

not “inconsistent with other congressional directives”).

3

The court below simply disregarded §402.03’s interpre

tation of the ESA’s reach, dismissing “the regulation’s

reference to ‘discretionary . . . involvement’ ” as merely

“congruent with the statutory reference to actions ‘author

ized, funded, or carried out’ by the agency.” 420 F. 3d,

968. But this reading cannot be right. Agency discretion

presumes that an agency can exercise “judgment” in con

nection with a particular action. See Citizens to Preserve

Overton Park, Inc. v. Volpe, 401 U. S. 402, 415–416 (1971);

see also Random House Dictionary of the English Lan

guage 411 (unabridged ed. 1967) (“discretion” defined as

“the power or right to decide or act according to one’s own

judgment; freedom of judgment or choice”). As the manda

tory language of §402(b) itself illustrates, not every action

authorized, funded, or carried out by a federal agency is a

product of that agency’s exercise of discretion.

The dissent’s interpretation of §402.03 is similarly

implausible. The dissent would read the regulation as

simply clarifying that discretionary agency actions are

included within the scope of §7(a)(2), but not confining the

statute’s reach to such actions. See post, at 7–11. But this

reading would render the regulation entirely superfluous.

Nothing in either §7(a)(2) or the other agency regulations

interpreting that section, see §402.02, suggests that dis

cretionary actions are excluded from the scope of the ESA,

and there is thus no need for a separate regulation to

bring them within the statute’s scope. On the dissent’s

reading, §402.03’s reference to “discretionary” federal

involvement is mere surplusage, and we have cautioned

against reading a text in a way that makes part of it re

22 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

dundant. See, e.g., TRW Inc. v. Andrews, 534 U. S. 19, 31

(2001).

This history of the regulation also supports the reading

to which we defer today. As the dissent itself points out,

the proposed version of §402.03 initially stated that “Sec

tion 7 and the requirements of this Part apply to all ac

tions in which there is Federal involvement or control,” 48

Fed. Reg. 29999 (1983) (emphasis added); the Secretary of

the Interior modified this language to provide (as adopted

in the Final Rule now at issue) that the statuory require

ments apply to “all actions in which there is discretionary

Federal involvement or control,” 51 Fed. Reg. 19958 (1986)

(emphasis added). The dissent’s reading would rob the

word “discretionary” of any effect, and substitute the

earlier, proposed version of the regulation for the text that

was actually adopted.

In short, we read §402.03 to mean what it says: that

§7(a)(2)’s no-jeopardy duty covers only discretionary

agency actions and does not attach to actions (like the

NPDES permitting transfer authorization) that an agency

is required by statute to undertake once certain specified

triggering events have occurred. This reading not only is

reasonable, inasmuch as it gives effect to the ESA’s provi

sion, but also comports with the canon against implied

repeals because it stays §7(a)(2)’s mandate where it would

effectively override otherwise mandatory statutory duties.

D

Respondents argue that our opinion in TVA v. Hill, 437

U. S. 153 (1978), supports their contrary position. In that

case, we held that the ESA prohibited the Tennessee

Valley Authority (TVA) from putting into operation the

Tellico Dam—despite the fact that the agency had already

spent over $100 million on the nearly completed project—

because doing so would have threatened the critical habi

tat of the endangered snail darter. In language on which

Cite as: 551 U. S. ____ (2007) 23

Opinion of the Court

respondents rely, the Court concluded that “the ordinary

meaning” of §7 of the ESA contained “no exemptions” and

reflected “a conscious decision by Congress to give endan

gered species priority over the ‘primary missions’ of fed

eral agencies.” Id., at 173, 185, 188.

TVA v. Hill, however, had no occasion to answer the

question presented in these cases. That case was decided

almost a decade before the adoption in 1986 of the regula

tions contained in 50 CFR §402.03. And in any event, the

construction project at issue in TVA v. Hill, while expen

sive, was also discretionary. The TVA argued that by

continuing to make lump-sum appropriations to the TVA,

some of which were informally earmarked for the Tellico

Dam project, Congress had implicitly repealed §7’s no-

jeopardy requirement as it applied to that project. See 437

U. S., at 189–193. The Court rejected this argument,

concluding that “[t]he Appropriations Acts did not them

selves identify the projects for which the sums had been

appropriated” and that reports by congressional commit

tees allegedly directing the TVA to complete the project

lacked the force of law. Id., at 189, n. 35. Central to the

Court’s decision was the conclusion that Congress did not

mandate that the TVA put the dam into operation; there

was no statutory command to that effect; and there was

therefore no basis for contending that applying the ESA’s

no-jeopardy requirement would implicitly repeal another

affirmative congressional directive.9

——————

9 The dissent is incorrect in suggesting that “if the Secretary of the

Interior had not declared the snail darter an endangered species . . . the

TVA surely would have been obligated to spend the additional funds

that Congress appropriated to complete the project.” Post, at 4. To the

contrary, the Court in TVA v. Hill found that there was no clear repug

nancy between the ESA and the Acts appropriating funds to the TVA

because the latter simply did not require the agency to use any of the

generally appropriated funds to complete the Tellico Dam project. 437

U. S., at 189–193.

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Opinion of the Court

TVA v. Hill thus supports the position, expressed in

§402.03, that the ESA’s no-jeopardy mandate applies to

every discretionary agency action—regardless of the ex

pense or burden its application might impose. But that

case did not speak to the question whether §7(a)(2) applies

to non-discretionary actions, like the one at issue here.

The regulation set forth in 50 CFR §402.03 addressed that

question, and we defer to its reasonable interpretation.

IV

Finally, respondents and their amici argue that, even if

§7(a)(2) is read to apply only to “discretionary” agency

actions, the decision to transfer NPDES permitting au

thority to Arizona represented such an exercise of discre

tion. They contend that the EPA’s decision to authorize a

transfer is not entirely mechanical; that it involves some

exercise of judgment as to whether a State has met the

criteria set forth in §402(b); and that these criteria incor

porate references to wildlife conservation that bring con

sideration of §7(a)(2)’s no-jeopardy mandate properly

within the agency’s discretion.

The argument is unavailing. While the EPA may exer

cise some judgment in determining whether a State has

demonstrated that it has the authority to carry out

§402(b)’s enumerated statutory criteria, the statute clearly

does not grant it the discretion to add another entirely

separate prerequisite to that list. Nothing in the text of

§402(b) authorizes the EPA to consider the protection of

threatened or endangered species as an end in itself when

evaluating a transfer application. And to the extent that

some of the §402(b) criteria may result in environmental

benefits to marine species,10 there is no dispute that Ari

——————

10 Forexample, §402(b) requires the EPA to consider whether the

State has the legal authority to enforce applicable water quality stan

dards—some of which, in turn, are informed by the “judgment” of the

EPA’s Administrator. 33 U. S. C. §1342(b)(1)(A); see also, e.g., §1312.

Cite as: 551 U. S. ____ (2007) 25

Opinion of the Court

zona has satisfied each of those statutory criteria.

Respondents’ argument has been disclaimed not only by

the EPA, but also by the FWS and the NMFS, the two

agencies primarily charged with administering §7(a)(2)

and the drafters of the regulations implementing that

section. Each agency recently issued a formal letter con

cluding that the authorization of an NPDES permitting

transfer is not the kind of discretionary agency action that

is covered by §402.03. See App. to Pet. for Cert. in No. 06–

549, at 103a–116a. An agency’s interpretation of the

meaning of its own regulations is entitled to deference

“unless plainly erroneous or inconsistent with the regula

tion,” Auer v. Robbins, 519 U. S. 452, 461 (1997) (internal

quotation marks omitted), and that deferential standard is

plainly met here.11

——————

But the permit transfer process does not itself require scrutiny of the

underlying standards or of their effect on marine or wildlife—only of

the state applicant’s “authority . . . [t]o issue permits which . . . apply,

and insure compliance with” the applicable standards. §1342(b)(1)(A)

(emphasis added). In any event, respondents do not dispute that, as

both the EPA and the FWS determined, the transfer of permitting

authority to Arizona officials would have no adverse water quality

related impact on any listed species. See App. to Pet. for Cert. in No.

06–340, at 562–563, 615–617.

11 Respondents also contend that the EPA has taken, or will take,

other discretionary actions apart from the transfer authorization that

implicate the ESA. For example, they argue that the EPA’s alleged

provision of funding to Arizona for the administration of its clean water

programs is the kind of discretionary agency action that is subject to

§7(a)(2). However, assuming this is true, any such funding decision is a

separate agency action that is outside the scope of this lawsuit. Re

spondents also point to the fact that, following the transfer of permit

ting authority, the EPA will retain oversight authority over the state

permitting process, including the power to object to proposed permits.

But the fact that the EPA may exercise discretionary oversight author

ity—which may trigger §7(a)(2)’s consultation and no-jeopardy obliga

tions—after the transfer does not mean that the decision authorizing

the transfer is itself discretionary.

26 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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Opinion of the Court

* * *

Applying Chevron, we defer to the agency’s reasonable

interpretation of ESA §7(a)(2) as applying only to “actions

in which there is discretionary Federal involvement or

control.” 50 CFR §402.03. Since the transfer of NPDES

permitting authority is not discretionary, but rather is

mandated once a State has met the criteria set forth in

§402(b) of the CWA, it follows that a transfer of NPDES

permitting authority does not trigger §7(a)(2)’s consulta

tion and no-jeopardy requirements. Accordingly, the

judgment of the Court of Appeals for the Ninth Circuit is

reversed, and these cases are remanded for further pro

ceedings consistent with this opinion.

Cite as: 551 U. S. ____ (2007) 1

STEVENS, J., dissenting

SUPREME COURT OF THE UNITED STATES

_________________

Nos. 06–340 and 06–549

_________________

NATIONAL ASSOCIATION OF HOME BUILDERS,

ET AL., PETITIONERS

06–340 v.

DEFENDERS OF WILDLIFE ET AL.

ENVIRONMENTAL PROTECTION AGENCY,

PETITIONER

06–549 v.

DEFENDERS OF WILDLIFE ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[June 25, 2007]

JUSTICE STEVENS, with whom JUSTICE SOUTER, JUSTICE

GINSBURG, and JUSTICE BREYER join, dissenting.

These cases present a problem of conflicting “shalls.”

On the one hand, §402(b) of the Clean Water Act (CWA)

provides that the Environmental Protection Agency (EPA)

“shall” approve a State’s application to administer a Na

tional Pollution Discharge Elimination System (NPDES)

permitting program unless it determines that nine criteria

are not satisfied. 33 U. S. C. §1342(b). On the other hand,

shortly after the passage of the CWA, Congress enacted

§7(a)(2) of the Endangered Species Act of 1973 (ESA),

which commands that federal agencies “shall” insure that

their actions do not jeopardize endangered species. 16

U. S. C. §1536(a)(2).

When faced with competing statutory mandates, it is

our duty to give full effect to both if at all possible. See,

e.g., Morton v. Mancari, 417 U. S. 535, 551 (1974) (“[W]hen

2 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

two statutes are capable of co-existence, it is the duty of

the courts, absent a clearly expressed congressional inten

tion to the contrary, to regard each as effective”). The

Court fails at this task. Its opinion unsuccessfully tries to

reconcile the CWA and ESA by relying on a federal regula

tion, 50 CFR §402.03 (2006), which it reads as limiting the

reach of §7(a)(2) to only discretionary federal actions, see

ante, at 17–19. Not only is this reading inconsistent with

the text and history of §402.03, but it is fundamentally

inconsistent with the ESA itself.

In the celebrated “snail darter” case, TVA v. Hill, 437

U. S. 153 (1978), we held that the ESA “reveals a con

scious decision by Congress to give endangered species

priority over the ‘primary missions’ of federal agencies,”

id., at 185. Consistent with that intent, Chief Justice

Burger’s exceptionally thorough and admirable opinion

explained that §7 “admits of no exception.” Id., at 173.

Creating precisely such an exception by exempting non

discretionary federal actions from the ESA’s coverage, the

Court whittles away at Congress’ comprehensive effort to

protect endangered species from the risk of extinction and

fails to give the Act its intended effect. After first giving

Hill the attention it deserves, I will comment further on

the irrelevance of §402.03 to these cases and offer other

available ways to give effect to both CWA and the ESA.

Having done so, I conclude by explaining why these cases

should be remanded to the EPA for further proceedings.

I

In Hill, we were presented with two separate questions:

(1) whether the ESA required a court to enjoin the opera

tion of the nearly completed Tellico Dam and Reservoir

Project because the Secretary of the Interior had deter

mined that its operation would eradicate a small endan

gered fish known as a snail darter; and (2) whether post

1973 congressional appropriations for the completion of

the Tellico Dam constituted an implied repeal of the ESA,

Cite as: 551 U. S. ____ (2007) 3

STEVENS, J., dissenting

at least insofar as it applied to the Dam. 437 U. S., at 156.

More than 30 pages of our opinion explain our affirmative

answer to the first question, see id., at 156–188, but just

over four pages sufficed to explain our negative answer to

the second, see id., at 189–193. While it is our ruling on

the first question that is relevant to the cases before us, it

is our refusal to hold that the ESA itself had been impli

edly repealed that the majority strangely deems most

significant. See ante, at 21–22.

In answering Hill’s first question, we did not discuss

implied repeals. On the contrary, that portion of the

opinion contained our definitive interpretation of the ESA,

in which we concluded that “the language, history, and

structure of the [ESA] indicates beyond doubt that Con

gress intended endangered species to be afforded the

highest of priorities.” 437 U. S., at 174; see also id., at 177

(“ ‘The dominant theme pervading all Congressional dis

cussion of the proposed [ESA] was the overriding need to

devote whatever effort and resources were necessary to

avoid further diminution of national and worldwide wild

life resources’ ” (quoting Coggins, Conserving Wildlife

Resources: An Overview of the Endangered Species Act of

1973, 51 N. D. L. Rev. 315, 321 (1975) (emphasis added in

Hill))). With respect to §7 in particular, our opinion could

not have been any clearer. We plainly held that it “admits

of no exception.” 437 U. S., at 173 (emphasis added).1

Our opinion in Hill explained at length why §7 imposed

obligations on “all federal agencies” to ensure that “actions

authorized, funded, or carried out by them do not jeopard

——————

1 See also Babbitt v. Sweet Home Chapter, Communities for Great

Ore., 515 U. S. 687, 692 (1995) (“Section 7 requires federal agencies to

ensure that none of their activities, including the granting of licenses

and permits, will jeopardize the continued existence of endangered

species ‘or result in the destruction or adverse modification of habitat of

such species which is determined by the Secretary . . . to be critical’ ”

(emphasis added)).

4 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

ize the continued existence of endangered species.” 437

U. S., at 173 (emphasis deleted; internal quotation marks

omitted). Not a word in the opinion stated or suggested

that §7 obligations are inapplicable to mandatory agency

actions that would threaten the eradication of an endan

gered species. Nor did the opinion describe the Tennessee

Valley Authority’s (TVA) attempted completion of the

Tellico Dam as a discretionary act. How could it? After

all, if the Secretary of the Interior had not declared the

snail darter an endangered species whose critical habitat

would be destroyed by operation of the Tellico Dam, the

TVA surely would have been obligated to spend the addi

tional funds that Congress appropriated to complete the

project.2 Unconcerned with whether an agency action was

mandatory or discretionary, we simply held that §7 of the

ESA

“reveals an explicit congressional decision to require

agencies to afford first priority to the declared na

tional policy of saving endangered species. The

pointed omission of the type of qualifying language

previously included in endangered species legislation

reveals a conscious decision by Congress to give en

dangered species priority over the ‘primary missions’

——————

2 The Court misreads this sentence and, in so doing, overreads our

decision in Hill. JUSTICE ALITO maintains that Hill held that the “acts

appropriating funds to the TVA . . . did not require the agency to use

any of the generally appropriated funds to complete the Tellico Dam

project.” Ante, at 23–24, n. 9. But Hill said no such thing. That case

only held that the subsequent appropriation of funds for the Tellico

Dam Project could not overcome the mandatory requirements of §7 of

the ESA; it did not hold that the TVA would not have been required to

spend any and all appropriated funds if the ESA had never been

passed. See Hill, 437 U. S., at 189–190. If the ESA had never been

enacted and did not stand in the way of the completion of the Tellico

Dam, there is no doubt that the TVA would have finished the project

that Congress had funded.

Cite as: 551 U. S. ____ (2007) 5

STEVENS, J., dissenting

of federal agencies. ” Id., at 185 (emphasis added).3

The fact that we also concluded that the post-1973

congressional appropriations did not impliedly repeal the

ESA provides no support for the majority’s contention that

the obligations imposed by §7(a)(2) may be limited to

discretionary acts. A few passages from the relevant parts

of Hill belie that suggestion. After noting the oddity of

holding that the interest in protecting the survival of a

relatively small number of 3-inch fish “would require the

permanent halting of a virtually completed dam for which

Congress has expended more than $100 million,” we found

“that the explicit provisions of the Endangered Species Act

require precisely that result.” Id., at 172, 173. We then

continued:

“One would be hard pressed to find a statutory provi

sion whose terms were any plainer than those in §7 of

the Endangered Species Act. Its very words affirma

tively command all federal agencies ‘to insure that ac

tions authorized, funded, or carried out by them do

not jeopardize the continued existence’ of an endan

gered species or ‘result in the destruction or modifica

tion of habitat of such species . . . .’ ” Id., at 173 (quot

ing 16 U. S. C. §1536 (1976 ed.) (emphasis added in

Hill)).

We also reviewed the ESA’s history to identify a variety of

——————

3 The road not taken in Hill also helps to clarify our interpretation

that §7 was not limited to discretionary agency action. Throughout the

course of the litigation, the TVA insisted that §7 did not refer to “all the

actions that an agency can ever take.” Brief. for Petitioner in Tennessee

Valley Authority v. Hill, O.T. 1977, No. 76–1701, p. 26. Instead, the

TVA sought to restrict §7 to only those actions for “which the agency

has reasonable decision-making alternatives before it.” Ibid. We

rejected that narrow interpretation, stating that the only way to

sustain the TVA’s position would be to “ignore the ordinary meaning of

plain language.” Hill, 437 U. S., at 173.

6 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

exceptions that had been included in earlier legislation

and unenacted proposals but were omitted from the final

version of the 1973 statute. We explained that earlier

endangered species legislation “qualified the obligation of

federal agencies,” but the 1973 Act purposefully omitted

“all phrases which might have qualified an agency’s re

sponsibilities.” 437 U. S., at 181, 182. Moreover, after

observing that the ESA creates only a limited number of

“hardship exemptions,” see 16 U. S. C. §1539—none of

which would apply to federal agencies—we applied the

maxim expressio unius est expression alterius to conclude

that “there are no exemptions in the Endangered Species

Act for federal agencies,”437 U. S., at 188.

Today, however, the Court countenances such an ex

emption. It erroneously concludes that the ESA contains

an unmentioned exception for nondiscretionary agency

action and that the statute’s command to enjoin the com

pletion of the Tellico Dam depended on the unmentioned

fact that the TVA was attempting to perform a discretion

ary act. But both the text of the ESA and our opinion in

Hill compel the contrary determination that Congress

intended the ESA to apply to “all federal agencies” and to

all “actions authorized, funded, or carried out by them.”

Id., at 173 (emphasis deleted).

A transfer of NPDES permitting authority under

§402(b) of the CWA is undoubtedly one of those “actions”

that is “authorized” or “carried out” by a federal agency.

See 16 U. S. C. §1536(b); 50 CFR §402.02 (defining “ac

tion” as “all activities or programs of any kind authorized,

funded, or carried out, in whole or in part, by Federal

agencies in the United States or upon the high seas.

Examples include, but are not limited to . . . actions di

rectly or indirectly causing modifications to the land,

water, or air”). It follows from Hill that §7(a)(2) applies to

such NPDES transfers—whether they are mandatory or

discretionary.

Cite as: 551 U. S. ____ (2007) 7

STEVENS, J., dissenting

II

Given our unequivocal holding in Hill that the ESA has

“first priority” over all other federal action, 437 U. S., at

185, if any statute should yield, it should be the CWA.

But no statute must yield unless it is truly incapable of

coexistence. See, e.g., Morton, 417 U. S., at 551. There

fore, assuming that §402(b) of the CWA contains its own

mandatory command, we should first try to harmonize

that provision with the mandatory requirements of

§7(a)(2) of the ESA.

The Court’s solution is to rely on 50 CFR §402.03, which

states that “Section 7 and the requirements of this part

apply to all actions in which there is discretionary Federal

involvement or control.” The Court explains that this

regulation “harmonizes the statutes by giving effect to the

ESA’s no-jeopardy mandate whenever an agency has

discretion to do so, but by lifting that mandate when the

agency is forbidden from considering such extrastatutory

factors.” Ante, at 17. This is not harmony, and it certainly

isn’t effect. Rather than giving genuine effect to §7(a)(2),

the Court permits a wholesale limitation on the reach of

the ESA. Its interpretation of §402.03 conflicts with the

text and history of the regulation, as well as our interpre

tation of §7 in the “snail darter” case.

To begin with, the plain language of §402.03 does not

state that its coverage is limited to discretionary actions.

Quite the opposite, the most natural reading of the text is

that it confirms the broad construction of §7 endorsed by

our opinion in Hill. Indeed, the only way to read §402.03

in accordance with the facts of the case and our holding

that §7 “admits of no exception[s],” 437 U. S., at 173, is

that it eliminates any possible argument that the ESA

does not extend to situations in which the discretionary

federal involvement is only marginal.

The Court is simply mistaken when it says that it reads

§402.03 “to mean what it says: that §7(a)(2)’s no-jeopardy

8 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

duty covers only discretionary agency actions . . . .” Ante,

at 21 (emphasis added). That is not, in fact, what §402.03

“says.” The word “only” is the Court’s addition to the text,

not the agency’s. Moreover, that text surely does not go on

to say (as the Court does) that the duty “does not attach to

actions (like the NPDES permitting transfer authoriza

tion) that an agency is required by statute to undertake

once certain specified triggering events have occurred.”

Ibid. If the drafters of the regulation had intended such a

far-reaching change in the law, surely they would have

said so by using language similar to that which the Court

uses today.

Nothing in the proceedings that led to the promulgation

of the regulation suggests any reason for limiting the pre

existing understanding of the scope of §7’s coverage. EPA

codified the current version of §402.03 in 1986 as part of a

general redrafting of ESA regulations. In the 1983 Notice

of Proposed Rulemaking, the proposed version of §402.03

stated that Ҥ7 and the requirements of this Part apply to

all actions in which there is Federal involvement or con

trol.” 48 Fed. Reg. 29999 (1983). Without any explana

tion, the final rule inserted the word “discretionary” before

“Federal involvement or control.” 51 Fed. Reg. 19958

(1986).4 Clearly, if the Secretary of the Interior meant to

limit the pre-existing understanding of the scope of the

coverage of §7(a)(2) by promulgating this regulation, that

intent would have been mentioned somewhere in the text

of the regulations or in contemporaneous comment about

them. See National Cable & Telecommunications Assn. v.

——————

4 See also Kilbourne, The Endangered Species Act Under the Micro

scope: A Closeup Look From A Litigator’s Perspective, 21 Envtl. L. 499,

529 (1991) (noting that the agency did not explain the addition of the

word “discretionary”); Weller, Limiting the Scope of the Endangered

Species Act: Discretionary Federal Involvement or Control Under

Section 402.03, 5 Hastings W.-Nw. J. Envtl. L. & Pol’y 309, 311, 334

(Spring 1999) (same)

Cite as: 551 U. S. ____ (2007) 9

STEVENS, J., dissenting

Brand X Internet Services, 545 U. S. 967, 1001 (2005)

(holding that an agency is free within “the limits of rea

soned interpretation to change course” only if it “ade

quately justifies the change”); Motor Vehicle Mfrs. Assn. of

United States, Inc. v. State Farm Mut. Automobile Ins. Co.,

463 U. S. 29, 48 (1983) (“We have frequently reiterated

that an agency must cogently explain why it has exercised

its discretion in a given manner”). Yet, the final rule said

nothing about limiting the reach of §7 or our decision in

Hill. Nor did it mention the change from the notice of

proposed rulemaking. I can only assume, then, that the

regulation does mean what both it and the notice of pro

posed rulemaking says: Section 7(a)(2) applies to discre

tionary federal action, but not only to discretionary action.

The only explanation the agency provided for §402.03

was the following:

“This section, which explains the applicability of sec

tion 7, implicitly covers Federal activities within the

territorial jurisdiction of the United States and upon

the high seas as a result of the definition of ‘action’ in

§402.02. The explanation for the scope of the term

‘action’ is provided in the discussion under §402.01

above.” 51 Fed. Reg. 19937.

This statement directs us to two sources: the definition of

“action” in §402.02 and the “explanation for the scope of

the term ‘action’ ” in §402.01. Ibid. Both confirm that

there was no intent to draw a distinction between discre

tionary and nondiscretionary actions.

Section 402.02 provides in relevant part:

“Action means all activities or programs of any kind

authorized, funded, or carried out, in whole or in part,

by Federal agencies in the United States or upon the

high seas. Examples include, but are not limited to:

“(a) actions intended to conserve listed species or

their habitat;

10 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

“(b) the promulgation of regulations . . . ” (second

and third emphases added.)

Actions in either of the described sub-categories are some

times mandatory and sometimes discretionary. Likewise,

as the italicized portions indicate, the term “action” ex

pressly refers to “all” agency activities or programs “of any

kind,” regardless of whether they are discretionary or

mandatory. By reading the term “discretionary” as a

limitation on “action,” the Court creates a contradiction in

the EPA’s own regulation.5

As for the final rule’s explanation for the scope of the

term ’action’ in §402.01, that too is fully consistent with

my interpretation of §402.03. That explanation plainly

states that “all Federal actions including ‘conservations

programs’ are subject to the consultation requirements of

section 7(a)(2) if they ‘may affect’ listed species or their

critical habitats.” 51 Fed. Reg. 19929 (emphasis added).

The regulation does not say all “discretionary” federal

actions, nor does it evince an intent to limit the scope of

§7(a)(2) in any way. Rather, it just restates that the ESA

applies to “all” federal actions, just as the notice of pro

——————

5 Petitioner National Association of Home Builders (NAHB) points to

the following language from the final rule as an indication that §7 only

applies to discretionary action: “ ‘a Federal agency’s responsibility

under section 7(a)(2) permeates the full range of discretionary authority

held by that agency.’ ” Brief for Petitoioners NAHB et al. 32 (quoting 51

Fed. Reg. 19937). However, that language is found in a different

section of the Final Rule—the section describing the definition of

“ ‘[r]easonable and prudent alternatives’ ” under 50 CFR §402.02. When

put in its proper context, the cited language simply indicates that any

“reasonable and prudent alternative” may involve the “maximum

exercise federal agency authority when to do so is necessary, in the

opinion of the Service, to avoid jeopardy.” 51 Fed. Reg. 19926. If that

isn’t enough, the quoted text supports my reading of §402.03 even on

petitioner’s reading. By indicating that an agency’s §7(a)(2) responsi

bility “permeates the full range” of its discretionary authority, EPA

confirmed that the ESA covers the all discretionary actions.

Cite as: 551 U. S. ____ (2007) 11

STEVENS, J., dissenting

posed rulemaking did. This explanation of the scope of the

word “action” is therefore a strong indication that the

Court’s reading of “discretionary” is contrary to its in

tended meaning.

An even stronger indication is the fact that at no point

in the administrative proceedings in these cases did EPA

even mention it.6 As an initial matter, it is worth empha

sizing that even if EPA had relied on §402.03, its interpre

tation of the ESA would not be entitled to deference under

Chevron U. S. A. Inc. v. Natural Resources Defense Coun

cil, Inc., 467 U. S. 837 (1984), because it is not charged

with administering that statute, id., at 844 (“We have long

recognized that considerable weight should be accorded to

an executive department’s construction of a statutory

scheme it is entrusted to administer.” (emphasis added));

Department of Treasury v. FLRA, 837 F. 2d 1163, 1167

(CADC 1988) (“[W]hen an agency interprets a statute

other than that which it has been entrusted to administer,

its interpretation is not entitled to deference”). The De

partments of the Interior and Commerce, not EPA, are

charged with administering the ESA. See Babbitt v. Sweet

Home Chapter, Communities for Great Ore., 515 U. S.,

687, 703–704 (1995). And EPA has conceded that the

Department of the Interior’s biological opinion “did not

discuss 50 CFR. 402.03, and it did not address the ques

tion whether the consultation that produced the [biological

opinion] was required by the ESA.” Pet. for Cert. in

No. 06–549, p. 24; see App. 77–124 (never mentioning

§402.03). Left with this unfavorable administrative re

——————

6 EPA also did not rely on §402.03 in the Court of Appeals. See 420

F. 3d 946, 968 (“EPA makes no argument that its transfer decision was

not a ‘discretionary’ one within the meaning of 50 CFR §402.03. . . .

We may not affirm the EPA’s transfer decision on grounds not relied

upon by the agency. As the EPA evidently does not regard §402.03 as

excluding the transfer decision, we should not so interpret the regula

tions.” (citations omitted)).

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STEVENS, J., dissenting

cord, EPA can only lean on the fact that the Department of

the Interior has recently “clarified” its position regarding

§402.03 in a different administrative proceeding. See Pet.

for Cert. in No. 06–549, pp. 24–25; id., at 26 (“The recent

F[ish and Wildlife Service] and N[ational Marine Fisheries

Service] communications regarding Alaska’s pending

transfer application reflect those agencies’ considered

interpretations . . . of [50 CFR] 402.03”); App. to Pet. for

Cert. in No. 06–340, pp. 103a–116a; see also ante, at 12

n. 5. We have long held, however, that courts may not

affirm an agency action on grounds other than those

adopted by the agency in the administrative proceedings.

See SEC v. Chenery Corp., 318 U. S. 80, 87 (1943). The

majority ignores this hoary principle of administrative law

and substitutes a post-hoc interpretation of §7(a)(2) and

§402.03 for that of the relevant agency. For that reason

alone, these cases should be remanded to the agency. And

for the other reasons I have given, §402.03 cannot be used

to harmonize the CWA and the ESA.

III

There are at least two ways in which the CWA and the

ESA can be given full effect without privileging one stat

ute over the other.

A

The text of §7(a)(2) itself provides the first possible way

of reconciling that provision with §402(b) of the CWA.

The subsection reads:

“Each Federal agency shall, in consultation with and

with the assistance of the Secretary, insure that any

action authorized, funded, or carried out by such

agency (hereinafter in this section referred to as an

‘agency action’) is not likely to jeopardize the contin

ued existence of any endangered species or threatened

species or result in the destruction or adverse modifi

Cite as: 551 U. S. ____ (2007) 13

STEVENS, J., dissenting

cation of habitat of such species which is determined

by the Secretary, after consultation as appropriate

with affected States, to be critical, unless such agency

has been granted an exemption for such action by the

Committee pursuant to subsection (h) of this section.”

16 U. S. C. §1536(a)(2) (emphasis added).

The Court is certainly correct that the use of the word

“shall” in §7(a)(2) imposes a mandatory requirement on

the federal agencies. See ante, at 14. It is also correct

that the ESA’s “mandate is to be carried out through

consultation and may require the agency to adopt an

alternative course of action.” Ante, at 15. The Court is too

quick to conclude, however, that this consultation re

quirement creates an irreconcilable conflict between this

provision and §402(b) of the CWA. It rushes to this flawed

judgment because of a basic conceptual error—an error

that is revealed as early as the first paragraph of its opin

ion. Rather than attempting to find a way to give effect to

§7(a)(2)’s consultation requirement, the Court frames the

question presented as “whether §7(a)(2) effectively oper

ates as a tenth criterion on which the transfer of permit

ting power under the first statute must be conditioned. ”

Ante, at 1–2. The Court is not alone in this. The author of

the Ninth Circuit opinion below also stated that the ESA

“adds one requirement to the list of considerations under

the Clean Water Act permitting transfer provision.” 450

F. 3d, at 404 n. 2 (2006) (Berzon, J., concurring in denial of

rehearing en banc) (emphasis in original). But while the

ESA does mandate that the relevant agencies “consul[t]”

with the Interior Department, that consultation process

also provides a way for the agencies to give effect to both

statutes.

The first step in the statutory consultation process is to

identify whether any endangered species will be affected

by an agency action. An agency proposing a particular

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STEVENS, J., dissenting

action, such as an NPDES transfer, will typically ask the

Secretary of the Interior whether any listed species may

be present in the area of the proposed action and whether

that action will “affect” those species. See 16 U. S. C.

§1536(c). It is entirely possible that no listed species will

be affected, and any anticipated conflict between the ESA

and another statute will have been avoided at this thresh

old stage. If, however, the Secretary determines that a

proposed action may affect an endangered species or its

critical habitat, the agency must formally consult with the

Secretary. This consultation culminates in the issuance of

a “biological opinion,” which “detail[s] how the agency

action affects the species or its critical habitat.”

§1536(b)(3)(A); see also 50 CFR §402.14(h). Even at this

stage, it is still possible that formal consultation will

reveal that the agency action will not jeopardize any spe

cies. See, e.g., 63 Fed. Reg. 51199 (1998) (noting that FWS

rendered a “no jeopardy” finding with respect to the trans

fer of permitting authority to Texas).

If the biological opinion concludes that the agency action

would put a listed species in jeopardy, however, the ESA

contains a process for resolving the competing demands of

agency action and species protection. The ESA provides

that “the Secretary shall suggest those reasonable and

prudent alternatives which he believes would not violate

subsection (a)(2) and can be taken by the Federal agency

or applicant in implementing the agency action.” 16

U. S. C. §1536(b)(3)(A); see also 50 CFR §402.14(h)(3).

The agency’s regulations define “[r]easonable and prudent

alternatives” as

“alternative actions identified during formal consul

tation that can be implemented in a manner consis

tent with the intended purpose of the action, that can

be implemented consistent with the scope of the Fed

eral agency’s legal authority and jurisdiction, that is

Cite as: 551 U. S. ____ (2007) 15

STEVENS, J., dissenting

economically and technologically feasible, and that the

Director [of FWS] believes would avoid the likelihood

of jeopardizing the continued existence of listed spe

cies or resulting in the destruction or adverse modifi

cation of critical habitat. ” 50 CFR §402.02.

Thus, in the face of any conflict between the ESA and

another federal statute, the ESA and its implementing

regulations encourage federal agencies to work out a

reasonable alternative that would let the proposed action

move forward “consistent with [its] intended purpose” and

the agency’s “legal authority,” while also avoiding any

violation of §7(a)(2).

When applied to the NPDES transfer program, the

“reasonable and prudent alternatives” process would

enable EPA and the Department of the Interior to develop

a substitute that would allow a transfer of permitting

authority and would not jeopardize endangered species.

Stated differently, the consultation process would gener

ate an alternative course of action whereby the transfer

could still take place—as required by §402(b) of the

CWA—but in such a way that would honor the mandatory

requirements of §7(a)(2) of the ESA. This should come as

no surprise to EPA, as it has engaged in pre-transfer

consultations at least six times in the past and has stated

that it is not barred from doing so by the CWA.7

Finally, for the rare case in which no “reasonable and

prudent alternative” can be found, Congress has provided

——————

7 See, e.g., 63 Fed. Reg. 51199 (1998) (approving Texas’ application to

administer the NPDES program after consultation with FWS and

stating that “EPA believes that section 7 does apply” to EPA’s action);

61 Fed. Reg. 65053 (1996) (approving Oklahoma’s NPDES application

after consultation with FWS and stating that “EPA’s approval of the

State permitting program under section 402 of the Clear Water Act is a

federal action subject to [§7’s consultation] requirement”); see also Tr.

of Oral Arg. 5 (conceding that EPA conducted six pre-transfer consulta

tions in the past).

16 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

yet another mechanism for resolving any conflicts between

the ESA and a proposed agency action. In 1978, shortly

after our decision in Hill, Congress amended the ESA to

create the “Endangered Species Committee,” which it

authorized to grant exemptions from §7(a)(2). 16 U. S. C.

§1536(e). Because it has the authority to approve the

extinction of an endangered species, the Endangered

Species Committee is colloquially described as the “God

Squad” or “God Committee.” In light of this weighty

responsibility, Congress carefully laid out requirements

for the God Committee’s membership,8 procedures,9 and

the factors it must consider in deciding whether to grant

an exemption.10

——————

8 The Endangered Species Committee is composed of six high-ranking

federal officials and a representative from each affected State ap

pointed by the President. See 16 U. S. C. §1536(e)(3).

9 See 16 U. S. C. §§1536(e)–(l).

10 Title 16 U. S. C. §1536(h)(1) provides:

“The Committee shall grant an exemption from the requirements of

subsection (a)(2) for an agency action if, by a vote of not less than five of

its members voting in person—

“(A) it determines on the record, based on the report of the Secretary,

the record of the hearing held under subsection (g)(4) and on such other

testimony or evidence as it may receive, that—

“(i) there are no reasonable and prudent alternatives to the agency

action;

“(ii) the benefits of such action clearly outweigh the benefits of

alternative courses of action consistent with conserving the species or

its critical habitat, and such action is in the public interest;

“(iii) the action is of regional or national significance; and

“(iv) neither the Federal agency concerned nor the exemption appli

cant made any irreversible or irretrievable commitment of resources

prohibited by subsection (d); and

“(B) it establishes such reasonable mitigation and enhancement

measures, including, but not limited to, live propagation, transplan

tation, and habitat acquisition and improvement, as are necessary

and appropriate to minimize the adverse effects of the agency action

upon the endangered species, threatened species, or critical habitat

concerned.”

Cite as: 551 U. S. ____ (2007) 17

STEVENS, J., dissenting

As the final arbiter in situations in which the ESA

conflicts with a proposed agency action, the God Commit

tee embodies the primacy of the ESA’s mandate and

serves as the final mechanism for harmonizing that Act

with other federal statutes. By creating this Committee,

Congress recognized that some conflicts with the ESA may

not be capable of resolution without having to forever

sacrifice some endangered species. At the same time, the

creation of this last line of defense reflects Congress’ view

that the ESA should not yield to another federal action

except as a final resort and except when authorized by

high level officials after serious consideration. In short,

when all else has failed and two federal statutes are inca

pable of resolution, Congress left the choice to the Com

mittee—not to this Court; it did not limit the ESA in the

way the majority does today.

B

EPA’s regulations offer a second way to harmonize the

CWA with the ESA. After EPA has transferred NPDES

permitting authority to a State, the agency continues to

oversee the State’s permitting program. See Arkansas v.

Oklahoma, 503 U. S. 91, 105 (1992) (“Congress preserved

for the Administrator broad authority to oversee state

permit programs”). If a state permit is “outside the guide

lines and the requirements” of the CWA, EPA may object

to it and block its issuance. See 33 U. S. C. §1342(d)(2); 66

Fed. Reg. 11206 (2001). Given these ongoing responsibili

ties, EPA has enacted a regulation that requires a State to

enter into a Memorandum of Agreement (MOA) that sets

forth the particulars of the agency’s oversight duties. See

40 CFR §123.24(a) (2006).

The regulation governing MOAs contains several de

tailed requirements. For instance, the regulation states

that an MOA must contain “[p]rovisions specifying classes

and categories of permit applications, draft permits and

18 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

proposed permits that the State will send to the [EPA]

Regional Administrator for review, comment and, where

applicable, objection,” §123.24(b)(2); “[p]rovisions specify

ing the frequency and content of reports, documents and

other information which the State is required to submit to

the EPA,” §123.24(b)(3); and “[p]rovisions for coordination

of compliance monitoring activities by the State and by

EPA,” §123.24(b)(4)(i). More generally, the regulation

provides that an MOA “may include other terms, condi

tions, or agreements” that are “relevant to the administra

tion and enforcement of the State’s regulatory program.”

§123.24(a). Under the MOA regulation, furthermore, EPA

will not approve any MOA that restricts its statutory

oversight responsibility. Ibid.

Like the §7(a)(2) consultation process described above,

MOAs provide a potential mechanism for giving effect to

§7 of the ESA while also allowing the transfer of permit

ting authority to a State. It is important to remember

that EPA must approve an MOA prior to the transfer of

NPDES authority. As such, EPA can use—and in fact has

used—the MOA process to structure its later oversight in

a way that will allow it to protect endangered species in

accordance with §7(a)(2) of the ESA. EPA might negotiate

a provision in the MOA that would require a State to

abide by the ESA requirements when issuing pollution

permits. See Brief for American Fisheries Society et al. as

Amici Curiae 28. (“In the Maine MOA, for example, EPA

and the state agreed that state permits would protect

ESA-listed species by ensuring compliance with state

water quality standards”). Alternatively, “EPA could

require the state to provide copies of draft permits for

discharges in particularly sensitive habitats such as those

of ESA-listed species or for discharges that contain a

pollutant that threatens ESA-listed wildlife.” Id., at 10.

Or the MOA might be drafted in a way that would allow

the agency to object to state permits that would jeopardize

Cite as: 551 U. S. ____ (2007) 19

STEVENS, J., dissenting

any and all endangered species. See id., at 28 (explaining

that the Maine MOA includes a provision allowing EPA to

“object to any state permit that risks harm to a listed

species by threatening water quality”). These are just

three of many possibilities. I need not identify other ways

EPA could use the MOA process to comply with the ESA;

it is enough to observe that MOAs provide a straightfor

ward way to give the ESA its full effect without restricting

§7(a)(2) in the way the Court does.

IV

As discussed above, I believe that the Court incorrectly

restricts the reach of §7(a)(2) to discretionary federal

actions. See Part II, supra. Even if such a limitation

were permissible, however, it is clear that EPA’s author

ity to transfer permitting authority under §402(b) is

discretionary.11

The EPA Administrator’s authority to approve state

permit programs pursuant to §402(b) of the CWA does not

even fit within the Court’s description of the category of

mandatory actions that the Court holds are covered by the

ESA. In the Court’s words, that category includes actions

“that an agency is required by statute to undertake once

certain specified triggering events have occurred.” Ante,

at 22. The “triggering event” for EPA’s approval is simply

the filing of a satisfactory description of the State’s pro

posed program. See 33 U. S. C. §1342(b). The statute

then commands that the EPA Administrator “shall ap

prove” the submitted program unless he determines that

state law does not satisfy nine specified conditions. Those

conditions are not “triggering events”; they are potential

objections to the exercise of the Administrator’s authority.

What is more, §402(b) is a perfect example of why our

——————

11 Because it is quite lengthy, I include the full text of §402(b) in an

appendix to this dissent.

20 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

analysis should not end simply because a statute uses the

word “shall.” Instead, we must look more closely at its

listed criteria to determine whether they allow for discre

tion, despite the use of “shall.” After all, as then-Justice

Rehnquist’s dissenting opinion in the “snail darter” case

explains, a federal statute using the word “shall” will

sometimes allow room for discretion. See Hill, 437 U. S. at

211–212 (Rehnquist, J., dissenting).12 In these cases,

there is significant room for discretion in EPA’s evaluation

of §402(b)’s nine conditions. The first criterion, for exam

ple, requires the EPA Administrator to examine five other

statutes and ensure that the State has adequate authority

to comply with each. 33 U. S. C. §1342(b)(1)(A). One of

those five statutes, in turn, expressly directs the Adminis

trator to exercise his “judgment.” §1312. Even the Court

acknowledges that EPA must exercise “some judgment in

determining whether a State has demonstrated that it has

the authority to carry out §402(b)’s enumerated statutory

criteria.” Ante, at 24. However, in the very same breath,

the Court states that the dispositive fact is that “the stat

ute clearly does not grant it the discretion to add another

entirely separate prerequisite to that list.” Ibid. This

reasoning flouts the Court’s own logic. Under the Court’s

reading of §402.03, §7(a)(2) applies to discretionary federal

actions of any kind. The Court plainly acknowledges that

EPA exercises discretion when deciding whether to trans

fer permitting authority to a State. If we are to take the

——————

12 See Gutierrez de Martinez v. Lamagno, 515 U. S. 417, 432–433, n. 9

(1995) (“Though ‘shall’ generally means ‘must,’ legal writers sometimes

use, or misuse, ‘shall’ to mean ‘should,’ ‘will,’ or even ‘may.’ See D.

Mellinkoff, Mellinkoff's Dictionary of American Legal Usage 402–403

(1992) (‘shall’ and ‘may’ are ‘frequently treated as synonyms’ and their

meaning depends on context); B. Garner, Dictionary of Modern Legal

Usage 939 (2d ed. 1995) (“Courts in virtually every English-speaking

jurisdiction have held—by necessity—that shall means may in some

contexts, and vice versa.’)”).

Cite as: 551 U. S. ____ (2007) 21

STEVENS, J., dissenting

Court’s approach seriously, once any discretion has been

identified—as it has here—§7(a)(2) must apply.13

The MOA regulation described in Part III–B, supra, also

demonstrates that an NPDES transfer is not as ministe

——————

13 The Court also claims that the “basic principle announced in” De

partment of Transportation v. Public Citizen, 541 U. S. 752 (2004),—

“that an agency cannot be considered the legal ‘cause’ of an action that

it has no statutory discretion not to take”—supports its reliance on

§402.03. Ante, at 20. First of all, the Court itself recognizes that it

must distance itself from that case, ibid., because Public Citizen dealt

with a procedural requirement under the National Environmental

Policy Act (NEPA), not a substantive requirement like that imposed by

§7(a)(2) of the ESA, see TVA v. Hill, 437 U. S. 158, 188, n. 34 (1978)

(holding that NEPA cases are “completely inapposite” to the ESA

context). What the Court does not recognize, however, is that what it

views as the “basic principle” of Public Citizen is stated too broadly and

therefore inapplicable to this case. Ante, at 20.

Our decision in Public Citizen turned on what we called “a critical

feature of the case”: that the Federal Motor Carrier Safety Administra

tion (FMCSA) had “no ability to countermand” the President’s lifting a

moratorium that prohibited certain motor carriers from obtaining

authority to operate within the United States. 541 U. S., at 766. Once

the President decided to lift that moratorium, and once the relevant

vehicles had entered the United States, FMCSA was required by

statute to register the vehicles if certain conditions were met. Ibid.

(“Under FMCSA’s entirely reasonable reading of this provision, it must

certify any motor carrier that can show that it is willing and able to

comply with the various substantive requirements for safety and

financial responsibility contained in DOT regulations; only the morato

rium prevented it from doing so for Mexican motor carriers before 2001”

(emphasis deleted)). Therefore, any potential NEPA concerns were

generated by another decisionmaker, the President, and not the

FMCSA. Here, by contrast, EPA is not required to act ministerially

once another person or agency has made a decision. Instead, EPA must

exercise its own judgment when considering the transfer of NPDES

authority to a State; it also has its own authority to deny such a trans

fer. Any effect on endangered species will be caused, even if indirectly,

by the agency’s own decision to transfer NPDES authority. Cf. 50 CFR

§402.02 (providing that the ESA will apply to all agency activities that

“directly or indirectly caus[e] modifications to the land, water, or air”

(emphasis added)).

22 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

rial a task as the Court would suggest. The agency retains

significant discretion under §123.24 over the content of an

MOA, which of course must be approved prior to a trans

fer. For instance, EPA may require a State to file reports

on a weekly basis or a monthly basis. It may require a

State to submit only certain classes and categories of

permit applications. And it may include any additional

terms and conditions that are relevant to the enforcement

of the NPDES program. There is ample room for judg

ment in all of these areas, and EPA has exercised such

judgment in the past when approving MOAs from many

States. See, e.g., Approval of Application by Maine to

Administer the NPDES Program, 66 Fed. Reg. 12791,

(2001); Approval of Application by Maine to Administer

the NPDES Program; Texas, 63 Fed. Reg. 51165 (1998).

In fact, in an earlier case raising a question similar to

this one, see American Forest & Paper Assn. v. EPA, 137

F. 3d 291, 298–299 (CA5 1998), EPA itself explained how

40 CFR §123.24 gives it discretion over the approval of a

State pollution control program, see Brief for EPA in No.

96–60874 (CA5). Arguing that “[i]ndicia of discretionary

involvement or control abound in [its] regulations,” the

agency listed its MOA regulation as a prime example.14

Again, because EPA’s approval of a State application to

administer an NPDES program entails significant—

indeed, abounding—discretion, I would find that §7(a)(2)

of the ESA applies even under the Court’s own flawed

theory of these cases.

——————

14 EPA also discussed several other regulations that give it discretion.

For example, under 40 CFR §123.61(b), EPA is required to solicit public

comments on a State’s transfer application, and it must “approve or

disapprove the program” after “taking into consideration all comments

received.” As EPA explained in its Fifth Circuit brief, if it “were simply

acting in a ministerial fashion, such weighing of the merits of public

comments would be unnecessary.” Brief for EPA in No. 96–60874

(CA5).

Cite as: 551 U. S. ____ (2007) 23

STEVENS, J., dissenting

V

Mindful that judges must always remain faithful to the

intent of the legislature, Chief Justice Burger closed his

opinion in the “snail darter” case with a reminder that

“[o]nce the meaning of an enactment is discerned and its

constitutionality determined, the judicial process comes to

an end.” Hill, 437 U. S., at 194. This Court offered a

definitive interpretation of the Endangered Species Act

nearly 30 years ago in that very case. Today the Court

turns its back on our decision in Hill and places a great

number of endangered species in jeopardy, including the

cactus ferruginous pygmy-owl and Pima pineapple cactus

at issue here. At the risk of plagiarizing Chief Justice

Burger’s fine opinion, I think it is appropriate to end my

opinion just as he did—with a quotation attributed to Sir

Thomas More that has as much relevance today as it did

three decades ago. This quotation illustrates not only the

fundamental character of the rule of law embodied in §7 of

the ESA but also the pernicious consequences of official

disobedience of such a rule. Repetition of that literary

allusion is especially appropriate today:

“The law, Roper, the law. I know what’s legal, not

what’s right. And I’ll stick to what’s legal. . . . I’m not

God. The currents and eddies of right and wrong,

which you find such plain-sailing, I can’t navigate, I’m

no voyager. But in the thickets of the law, oh there

I’m a forester. . . . What would you do? Cut a great

road through the law to get after the Devil? . . . And

when the last law was down, and the Devil turned

round on you—where would you hide, Roper, the laws

all being flat? . . . This country's planted thick with

laws from coast to coast—Man’s laws, not God’s—and

if you cut them down . . . d’you really think you could

stand upright in the winds that would blow then? . . .

Yes, I’d give the Devil benefit of law, for my own

24 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

safety’s sake.” R. Bolt, A Man for All Seasons, Act I,

p. 147 (Three Plays, Heinemann ed. 1967) (quoted in

Hill, 437 U. S., at 195).

Although its reasons have shifted over time, at both

the administrative level and in the federal courts, EPA

has insisted that the requirements of §7(a)(2) of the ESA

do not apply to its decision to transfer permitting author

ity under §402(b) of the CWA. See App. 114; Brief for

Petitioner EPA 16, 42. As I have explained above, that

conclusion is contrary to the text of §7(a)(2), our decision

in the TVA v. Hill, and the regulation on which the

agency has since relied and upon which the Court relies

on today. Accordingly, I would hold that EPA’s decision

was arbitrary and capricious under the Administrative

Procedure Act, see 5 U. S. C. §706(2)(A), and would re

mand to the agency for further proceedings consistent

with this opinion.

I respectfully dissent.

Cite as: 551 U. S. ____ (2007) 25

STEVENS, J., dissenting

Appendix to opinion of STEVENS, J.

APPENDIX TO OPINION OF STEVENS, J.

33 U. S. C. §1342(b)

“(b) State permit programs.

“At any time after the promulgation of the guidelines

required by subsection (i)(2) of section 1314 of this title,

the Governor of each State desiring to administer its own

permit program for discharges into navigable waters

within its jurisdiction may submit to the Administrator a

full and complete description of the program it proposes to

establish and administer under State law or under an

interstate compact. In addition, such State shall submit a

statement from the attorney general (or the attorney for

those State water pollution control agencies which have

independent legal counsel), or from the chief legal officer

in the case of an interstate agency, that the laws of such

State, or the interstate compact, as the case may be, pro

vide adequate authority to carry out the described pro

gram. The Administrator shall approve each submitted

program unless he determines that adequate authority

does not exist:

“(1) To issue permits which—

“(A) apply, and insure compliance with, any applicable

requirements of sections 1311, 1312, 1316, 1317, and 1343

of this title;

“(B) are for fixed terms not exceeding five years; and

“(C) can be terminated or modified for cause including,

but not limited to, the following:

“(i) violation of any condition of the permit;

“(ii) obtaining a permit by misrepresentation, or failure

to disclose fully all relevant facts;

“(iii) change in any condition that requires either a

temporary or permanent reduction or elimination of the

permitted discharge;

“(D) control the disposal of pollutants into wells;

“(2)(A) To issue permits which apply, and insure com

26 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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STEVENS, J., dissenting

Appendix to opinion of STEVENS, J.

pliance with, all applicable requirements of section 1318 of

this title; or

“(B) To inspect, monitor, enter, and require reports to at

least the same extent as required in section 1318 of this

title;

“(3) To insure that the public, and any other State the

waters of which may be affected, receive notice of each

application for a permit and to provide an opportunity for

public hearing before a ruling on each such application;

“(4) To insure that the Administrator receives notice of

each application (including a copy thereof) for a permit;

“(5) To insure that any State (other than the permitting

State), whose waters may be affected by the issuance of a

permit may submit written recommendations to the per

mitting State (and the Administrator) with respect to any

permit application and, if any part of such written recom

mendations are not accepted by the permitting State, that

the permitting State will notify such affected State (and

the Administrator) in writing of its failure to so accept

such recommendations together with its reasons for so

doing;

“(6) To insure that no permit will be issued if, in the

judgment of the Secretary of the Army acting through the

Chief of Engineers, after consultation with the Secretary

of the department in which the Coast Guard is operating,

anchorage and navigation of any of the navigable waters

would be substantially impaired thereby;

“(7) To abate violations of the permit or the permit

program, including civil and criminal penalties and other

ways and means of enforcement;

“(8) To insure that any permit for a discharge from a

publicly owned treatment works includes conditions to

require the identification in terms of character and volume

of pollutants of any significant source introducing pollut

ants subject to pretreatment standards under section

1317(b) of this title into such works and a program to

Cite as: 551 U. S. ____ (2007) 27

STEVENS, J., dissenting

Appendix to opinion of STEVENS, J.

assure compliance with such pretreatment standards by

each such source, in addition to adequate notice to the

permitting agency of (A) new introductions into such

works of pollutants from any source which would be a new

source as defined in section 1316 of this title if such source

were discharging pollutants, (B) new introductions of

pollutants into such works from a source which would be

subject to section 1311 of this title if it were discharging

such pollutants, or (C) a substantial change in volume or

character of pollutants being introduced into such works

by a source introducing pollutants into such works at the

time of issuance of the permit. Such notice shall include

information on the quality and quantity of effluent to be

introduced into such treatment works and any anticipated

impact of such change in the quantity or quality of effluent

to be discharged from such publicly owned treatment

works; and

(9) To insure that any industrial user of any publicly

owned treatment works will comply with sections 1284(b),

1317, and 1318 of this title.

Cite as: 551 U. S. ____ (2007) 1

BREYER, J., dissenting

SUPREME COURT OF THE UNITED STATES

_________________

Nos. 06–340 and 06–549

_________________

NATIONAL ASSOCIATION OF HOME BUILDERS,

ET AL., PETITIONERS

06–340 v.

DEFENDERS OF WILDLIFE ET AL.

ENVIRONMENTAL PROTECTION AGENCY,

PETITIONER

06–549 v.

DEFENDERS OF WILDLIFE ET AL.

ON WRITS OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE NINTH CIRCUIT

[June 25, 2007]

JUSTICE BREYER, dissenting.

I join JUSTICE STEVENS’ dissent, while reserving judg

ment as to whether §7(a)(2) of the Endangered Species Act

of 1973, 16 U. S. C. §1536(a)(2), really covers every possi

ble agency action even of totally unrelated agencies—such

as, say, a discretionary determination by the Internal

Revenue Service whether to prosecute or settle a particu

lar tax liability, see 26 U. S. C. §7121.

At the same time I add one additional consideration in

support of his (and my own) dissenting views. The Court

emphasizes that “[b]y its terms, the statutory language [of

§402(b) of the Clean Water Act, 33 U. S. C. §1342(b)] is

mandatory and the list exclusive; if the nine specified

criteria are satisfied, the EPA does not have the discretion

to deny a transfer application.” Ante, at 14 (emphasis

added). My own understanding of agency action leads me

to believe that the majority cannot possibly be correct in

2 NATIONAL ASSN. OF HOME BUILDERS v. DEFENDERS

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BREYER, J., dissenting

concluding that the structure of §402(b) precludes applica

tion of §7(a)(2) to the EPA’s discretionary action. See ante,

at 19–21 (STEVENS, J., dissenting). That is because grants

of discretionary authority always come with some implicit

limits attached. See L. Jaffe, Judicial Control of Adminis

trative Action 359 (1965) (discretion is “a power to make a

choice” from a “permissible class of actions”). And there

are likely numerous instances in which, prior to, but not

after, the enactment of §7(a)(2), the statute might have

implicitly placed “species preservation” outside those

limits.

To take one example, consider the statute that once

granted the old Federal Power Commission (FPC) the

authority to grant a “certificate of public convenience and

necessity” to permit a natural gas company to operate a

new pipeline. See 15 U. S. C. §717f(c)(1)(A). It says that

“a certificate shall be issued to any qualified applicant

therefor . . . if it is found that the applicant is able and

willing properly to do the acts and to perform the service

proposed . . . and that the proposed service . . . is or will be

required by the present or future public convenience and

necessity.” §717f(e).

Before enactment of the Endangered Species Act of

1973, 87 Stat. 884, it is at least uncertain whether the

FPC could have withheld a certificate simply because a

natural gas pipeline might threaten an endangered ani

mal, for given the Act’s language and history, species

preservation does not naturally fall within its terms. But

we have held that the Endangered Species Act changed

the regulatory landscape, “indicat[ing] beyond doubt that

Congress intended endangered species to be afforded the

highest of priorities.” TVA v. Hill, 437 U. S. 153, 174

(1978) (emphasis added). Indeed, the Endangered Species

Act demonstrated “a conscious decision by Congress to

give endangered species priority over the ‘primary mis

sions’ of federal agencies.” Id., at 185. And given a new

Cite as: 551 U. S. ____ (2007) 3

BREYER, J., dissenting

pipeline’s potential effect upon habitat and landscape, it

seems reasonable to believe, once Congress enacted the

new law, the FPC’s successor (the Federal Energy Regula

tory Commission) would act within its authority in taking

species-endangering effects into account.

To take another example, the Food and Drug Admini

stration (FDA) has, by statute, an “exclusive” list of crite

ria to consider in reviewing applications for approval of a

new drug. See 21 U. S. C. §355(d) (“If the Secretary finds .

. . [e.g.,] the investigations . . . do not include adequate

tests by all methods reasonably applicable to show

whether or not such drug is safe . . . he shall issue an

order refusing to approve the application”). Preservation

of endangered species is not on this “exclusive” list of

criteria. Yet I imagine that the FDA now should take

account, when it grants or denies drug approval, of the

effect of manufacture and marketing of a new drug upon

the preservation or destruction of an endangered species.

The only meaningful difference between the provision

now before us, §402(b) of the Clean Water Act, and the

energy- and drug-related statutes that I have mentioned is

that the very purpose of the former is to preserve the state

of our natural environment—a purpose that the Endan

gered Species Act shares. That shared purpose shows that

§7(a)(2) must apply to the Clean Water Act a fortiori.