Amicus Curiae Brief — Weyerhaeuser Company, Petitioner v. United States Fish and Wildlife Service, et al.

Supreme Court briefApr 30, 2018

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No. 17-71

IN THE

Supreme Court of the United States

————

WEYERHAEUSER COMPANY,

Petitioner,

UNITED STATES FISH AND WILDLIFE SERVICE, et al.,

Respondents.

————

On Writ of Certiorari to the

United State Court of Appeals

for the Fifth Circuit

————

BRIEF OF AMICUS CURIAE

ENERGY AND WILDLIFE ACTION COALITION

IN SUPPORT OF PETITIONER

————

STEVEN P. QUARLES

NOSSAMAN LLP

1666 K Street, NW

Suite 500

Washington, D.C. 20006

(202) 887-1400

BROOKE M. WAHLBERG

NOSSAMAN LLP

816 Congress Avenue

Suite 970

Austin, TX 78701

(512) 651-0660

SVEND A. BRANDT-ERICHSEN

Counsel of Record

NOSSAMAN LLP

601 Union Street

Suite 5305

Seattle, WA 98102

(206) 395-7632

sbrandterichsen@nossaman.com

Counsel for Amicus Curiae Energy and

Wildlife Action Coalition

April 30, 2018

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................................

iii

INTEREST OF THE AMICUS CURIAE ............

SUMMARY OF ARGUMENT .............................

ARGUMENT ........................................................

I. The ESA dictates that “critical habitat”

must be habitable .....................................

A. The operative provisions of the ESA

plainly state that critical habitat

must be habitable ................................

B. The Fifth Circuit’s analysis ignored

the operative provisions of the ESA

and the plain meaning of the word

“habitat.” ..............................................

C. The Service’s determination that

lands may be deemed “essential to the

conservation of a species” even though

not habitable by that species now or

in the reasonably foreseeable future is

not entitled to Chevron deference .......

II. Designating areas that are not habitable

by a listed species as “critical habitat”

harms the development and operation of

the nation’s energy infrastructure ...........

A. The electric energy industry in the

United States is investing heavily in

new generation, transmission and

distribution facilities and in enhancing the nation-wide electric grid .........

(i)

TABLE OF CONTENTS—Continued

Page

B. Energy projects that could have an

adverse effect on critical habitat face

significant costs, likely delays, and

higher operating costs .........................

C. Energy project developers seek to

avoid or minimize the impact of new

electricity generation, transmission,

and distribution infrastructure within

critical habitat .....................................

D. Extending ESA “critical habitat” protection to lands that cannot sustain a

listed species threatens to disrupt the

development and operation of the

nation’s energy infrastructure ............

CONCLUSION ....................................................

iii

TABLE OF AUTHORITIES

CASES

Page(s)

Chevron, U.S.A., Inc. v. Nat. Res.

Def. Council, Inc.,

467 U.S. 837, 104 S. Ct. 2778 (1984) .......passim

City of Arlington, Tex. v. Fed.

Commc’ns Comm’n,

569 U.S. 290, 133 S. Ct. 1863 (2013) ........ 15-16

Dolan v. U.S. Postal Serv.,

546 U.S. 481, 126 S. Ct. 1252 (2006) ........ 7, 10

Food and Drug Admin. v. Brown

& Williamson Tobacco Corp.,

529 U.S. 120, 120 S. Ct. 1291 (2000) ........ 14, 15

Mich. v. Envtl. Prot. Agency,

576 U.S. __, 135 S. Ct. 2699 (2015) ..........

Nat’l Ass’n of Home Builders v.

Defenders of Wildlife,

551 U.S. 644, 127 S. Ct. 2518 (2007) ........ 13, 14

Perrin v. U.S.,

444 U.S. 37, 100 S. Ct. 311 (1979) ............

United Sav. Assn. of Tex. v. Timbers

of Inwood Forest Assocs., Ltd.,

484 U.S. 365, 108 S. Ct. 626 (1988) ..........

Util. Air Regulatory Grp. v.

Envtl. Prot. Agency,

573 U.S. ___, 134 S. Ct. 2427 (2014) ........ 14, 15

STATUTES AND REGULATIONS

16 U.S.C. § 1531(b) .......................................

6, 8

16 U.S.C. § 1532(5)(A) ..................................

TABLE OF AUTHORITIES—Continued

Page(s)

16 U.S.C. § 1532(5)(A)(i) ............................ 7, 9, 12

16 U.S.C. § 1532(5)(A)(ii) ............................passim

16 U.S.C. § 1532(5)(C) .................................passim

16 U.S.C. § 1533(a) ......................................passim

16 U.S.C. § 1533(a)(3)(A)..............................

3, 4

16 U.S.C. § 1533(a)(3)(A)(i) .........................passim

16 U.S.C. § 1533(a)(3)(A)(ii) .........................

16 U.S.C. § 1536 ..........................................passim

16 U.S.C. § 1536(a)(2)..................................passim

33 U.S.C. § 1344 ..........................................passim

33 C.F.R. § 330.1(b) ......................................... 21, 22

33 C.F.R. § 330.4(f)(2) ....................................

43 U.S.C. § 1761 ...........................................

50 C.F.R. § 402.02(c).....................................

50 C.F.R. § 402.12 ..........................................

50 C.F.R. § 402.14(a) ....................................

50 C.F.R. § 402.14(c) ......................................

50 C.F.R. § 402.14(g) ....................................

50 C.F.R. § 402.14(h) .................................... 21, 25

50 C.F.R. § 402.16(d) ......................... 20, 25, 30-31

Issuance and Reissuance of Nationwide

Permits, 82 Fed. Reg. 1860 (Jan. 6, 2017) ...

TABLE OF AUTHORITIES—Continued

OTHER AUTHORITIES

Page(s)

American Wind Energy Association, U.S.

Wind Industry Fourth Quarter 2017

Market Report (January 25, 2017),

available at: http: //awea.files.cms-plus.

com/FileDownloads/pdfs/4Q%202017%2

0AWEA%20Market%20Report%20Publi

c%20Version.pdf........................................

Edison Electric Institute, Historical and

Projected Transmission Investment

(September 2017), available at: http://

www.eei.org/issuesandpolicy/transmissio

n/Documents/bar_Transmission_Investm

ent.pdf ......................................................

Edison Electric Institute, Transmission,

available at: http://www.eei.org/issues an

dpolicy/transmission/Pages/default.aspx

(last visited April 25, 2018) .....................

Federal Energy Regulatory Commission,

Office of Enforcement, Energy Market

Snapshot (June 2017), available at:

https://www.ferc.gov/market-oversight/mk

t-snp-sht/2017/06-2017-snapshot-nationa

l.pdf ............................................................

“Habitat,” Merriam-Webster Dictionary

(11th ed. 2016) ..........................................

John Ruhs, Acting Deputy Director for

Operation, BLM, Statement before the

Senate Committee on Energy and Natural

Resources (September 19, 2017), available at: https://www.doi.gov/ocl/electricinfrastructure-vegetation-management ..

TABLE OF AUTHORITIES—Continued

Page(s)

NERC FAC-003-4, Transmission Vegetation Management (October 1, 2016),

available at: https://www.nerc.com/pa/

Stand/Reliability%20Standards/FAC-0034.pdf ........................................................... 25, 26

Solar Energy Industry Association, U.S.

Solar Market Through 2017: Key

Takeaways, available at: https://www.

seia.org/solar-industry-research-data (last

visited April 25, 2018) ..............................

U.S. Fish and Wildlife Service and National

Marine Fisheries Service, Endangered

Species Consultation Handbook, Procedures for Conducting Consultation and

Conference Activities Under Section 7 of

the Endangered Species Act (March

1998), available at: https://www.fws.gov/

endangered/esa-library/pdf/esa_section7_

handbook.pdf ............................................. 23, 30

U.S. Fish & Wildlife Service, Land-Based

Wind Energy Guidelines (March 23,

2012), available at: https://www.fws.gov/

ecological-services/es-library/pdfs/WEG_

final.pdf .....................................................

INTEREST OF THE AMICUS CURIAE1

The Energy and Wildlife Action Coalition (“EWAC”)

respectfully submits this brief as amicus curiae in

support of Petitioner Weyerhaeuser Company. EWAC

is an unincorporated association headquartered in

Washington, D.C. comprised of electric utilities, electric transmission and distribution providers, renewable

energy companies, and related trade associations. EWAC

members operate throughout the United States.

EWAC’s fundamental goal is to evaluate, develop,

and promote reasonable environmental policies for

federally protected wildlife and closely related natural

resources while ensuring the continued generation

and transmission of reliable and affordable electricity.

EWAC supports public policies, based on sound science,

that protect wildlife and natural resources in a reasonable, consistent, and cost-effective manner.

The Fifth Circuit’s ruling, if affirmed by this Court,

would have a significant negative impact on EWAC

members. EWAC’s members develop, construct, maintain, own, and operate electric generation, transmission,

and distribution facilities that are located or proposed

to be built on private and public lands, including lands

that are not habitable by threatened or endangered

species (“listed species”), and yet these areas could be

designated as critical habitat for listed species under

Pursuant to Sup. Ct. R. 37.6, amicus curiae states that no

counsel for a party has written this brief in whole or in part, and

that no person or entity, other than amicus curiae, its members,

or its counsel, has made a monetary contribution to the preparation or submission of this brief. Pursuant to Sup. Ct. R. 37.3(a),

Petitioner and Respondents have provided blanket written consent to the filing of amicus briefs in this matter and their written

consent is on file.

the criteria upheld by the divided panel of the Fifth

Circuit.

Federal agencies are required to consult with the

U.S. Fish and Wildlife Service (“Service”) under

section 7(a)(2) of the Endangered Species Act (“ESA”),

16 U.S.C. § 1536(a)(2), if a proposed facility is located

on or crosses federal lands, requires a federal permit

or approval, or receives federal financial support and

may adversely affect a listed species or critical habitat.

In other words, if critical habitat is present in any of

these scenarios, section 7(a)(2) triggers additional

review.

Thus, for example, many EWAC members have

existing facilities on federal lands and will continue to

construct new facilities across federal lands, often

with few if any practical alternative locations, to meet

the electricity needs of their customers. The siting of

such infrastructure requires federal authorization and

so can trigger section 7 review, including as to impacts

on critical habitat. Furthermore, once constructed,

electric energy infrastructure is likely to remain on the

land for many decades. Critical habitat designations

can affect the renewal of authorization for use of the

federal lands, affecting existing infrastructure and

constraining operation and maintenance of existing

facilities on both private and public lands.

Further, many EWAC members’ facilities on public

or private lands require federal approvals such as

Clean Water Act (“CWA”) section 404 permits and

Federal Energy Regulatory Commission (“FERC”)

licenses and some receive federally backed financing.

Again, these federal actions can trigger section 7. And

even absent the need for federal approvals, the existence of critical habitat or the threat of a potential

critical habitat designation within a facility’s footprint

complicates private financing, as lenders and investors react to the increased costs and risks posed by

critical habitat, which can increase the cost of capital

or result in financial reserve requirements, bonding or

parent company guarantees, all of which make financing more difficult and more expensive and can even

result in the demise of the project.

SUMMARY OF ARGUMENT

The Fifth Circuit wrongly upheld a decision by the

Service that unlawfully designated an area in Louisiana

as “critical habitat” for the endangered dusky gopher

frog (Rana sevosa) even though there is no occurrence

of the species on those lands, that area cannot sustain

the species, now or in the foreseeable future, and there

is no connection to any area that is actually habitable

by that species. See Pet. App. 1a-77a.

In reviewing the Service’s action, the Fifth Circuit

incorrectly limited its analysis to the ESA’s definitions

of occupied and unoccupied “critical habitat,” 16 U.S.C.

§ 1532(5)(A), and ignored the criteria for critical habitat contained in sections 4 and 7 of the ESA, the

statute’s operative provisions, which specify that critical habitat is a subset of the habitat of a listed species.

16 U.S.C. §§ 1533(a)(3)(A), 1536(a)(2); Pet. App. 15a,

18a, 23a-32a.

The Fifth Circuit’s narrow focus on the ESA’s

definition of “critical habitat,” to the exclusion of the

operative provisions of the statute, allowed it to

wrongly conclude: “There is no habitability requirement in the text of the ESA or the implementing

regulations.” Pet. App. 23a.

To the contrary, the requirement that critical

habitat be part of the habitat of a species is a plain and

unambiguous requirement of the ESA. When the

Service lists a species under the ESA, the statute

directs the Service, “to the maximum extent prudent

and determinable,” to designate by regulation “any

habitat of such species which is then considered to be

critical habitat.” 16 U.S.C. § 1533(a)(3)(A) (emphasis

added). The ESA also requires federal agencies to

consult with the Service before undertaking or

authorizing an action that is likely to destroy or

adversely modify “habitat . . . which is determined . . .

to be critical.” 16 U.S.C. § 1536(a)(2).

The Fifth Circuit also improperly deferred to the

Service’s interpretation of the phrase “essential to the

conservation of the species” in the ESA’s definition of

unoccupied critical habitat, 16 U.S.C. § 1532(5)(A)(ii),

wrongly concluding that this phrase is the sole test for

designating unoccupied critical habitat and accepting

a Service interpretation of “essential” that conflicts

with the plain and unambiguous requirement of

section 4 of the ESA that critical habitat be “habitat of

such species.” 16 U.S.C. § 1533(a)(3)(A)(i).

As a result of these errors, the Fifth Circuit blessed

a standard that allows an area to be designated as

“critical habitat” even if it is currently uninhabitable

by a listed species and has no prospect of ever becoming habitable by that species. This fails to recognize

that “critical habitat” is, first and foremost, habitat

for a listed species. Among other consequences, this

unlawfully broad reading of critical habitat would

impose an unworkable and unreasonable regulatory

burden on the development and continuing operation

of electric energy infrastructure throughout the country.

Electricity generation, transmission and distribution facilities are located throughout the United

States. The total available installed electrical generating capacity in the United States is currently about

1,200 gigawatts from all sources (conventional and

renewable).2 The electric transmission network is the

backbone of the nation’s energy grid and consists of

more than 600,000 circuit miles of lines, 240,000 of

which are considered high-voltage lines.3 There is also

a spider web of distribution lines delivering electricity

from substations to consumers. Electricity generation,

transmission and distribution facilities may be found

in every corner of our country. As a result, the electric

energy industry frequently interacts with listed species

and critical habitat and has a profound interest in the

proper designation of critical habitat for listed species.

There are real consequences for the nation’s

electricity generation, transmission, and distribution

infrastructure that will result from designating areas

uninhabitable by a listed species as “critical habitat”

and from extending the protections of the ESA to those

areas. Through this amicus brief, EWAC offers the

Court a window into how the Fifth Circuit’s decision

could disrupt the development and ongoing operation

of its members’ facilities.

Federal Energy Regulatory Commission, Office of Enforcement, Energy Market Snapshot (June 2017), available at:

https://www.ferc.gov/market-oversight/mkt-snp-sht/2017/06-2017snapshot-national.pdf.

Edison Electric Institute, Transmission, available at: http://

www.eei.org/issuesandpolicy/transmission/Pages/default.aspx.

ARGUMENT

I. The ESA dictates that “critical habitat”

must be habitable.

A. The operative provisions of the ESA

plainly state that critical habitat must

be habitable.

One of the purposes of the ESA is “to provide a

means whereby the ecosystems upon which endangered species and threatened species depend may be

conserved.” 16 U.S.C. § 1531(b). The ESA is structured to protect the ecosystems upon which a listed

species depends through its provisions for designating

and protecting habitat that is determined to be critical

for that species – section 4 (the designation of critical

habitat) and section 7 (federal interagency consultation). 16 U.S.C. §§ 1533(a), 1536.

By its terms, section 4 of the ESA does not authorize

the Service to designate an area that is not habitable

by a listed species as “critical” for that species. It

directs that, when the Service lists a species, it shall,

“to the maximum extent prudent and determinable,”

designate by regulation “any habitat of such species

which is then considered to be critical habitat.” 16

U.S.C. § 1533(a)(3)(A)(i) (emphasis added). Under this

provision, lands that are not “habitat of such species”

cannot be “critical habitat.”

Section 4’s criteria for “critical habitat” also include

a temporal element: designation is limited to habitat

that is considered critical at the time the species is

listed (“then considered to be”). Id. The designation

of critical habitat may be revised “from time-to-time

thereafter as appropriate,” id. at § 1533(a)(3)(A)(ii),

which allows the Service to account for changes in

habitat over time. But nothing in section 4 authorizes

the Service to designate as “critical” an area that is not

currently habitable by the species, even if it might

become habitat at some future date.

Using nearly identical phrasing, section 7 of the

ESA also describes critical habitat as a subset of a

species’ existing habitat:

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 continued existence of any endangered species or threatened

species or result in the destruction or adverse

modification of habitat of such species which

is determined by the Secretary, after consultation as appropriate with affected States, to be

critical [pursuant to section 4] . . . .

16 U.S.C. § 1536(a)(2) (emphasis added). Section 7,

like section 4, is thus explicit that critical habitat must

first and foremost be habitat of the listed species.

The ESA’s definitions (section 3 of the Act) supplement the criteria for designating “critical habitat”

found in section 4, describing different requirements

depending on whether the area was occupied or

unoccupied by the species at the time the species was

listed. 16 U.S.C. §§ 1532(5)(A)(i) and (A)(ii). The

additional criteria contained in these definitions must

be read in conjunction with the unambiguous statements in sections 4 and 7 that critical habitat is a

subset of the habitat for a listed species. See Dolan v.

U.S. Postal Serv., 546 U.S. 481, 486, 126 S. Ct. 1252,

1257 (2006) (“Interpretation of a word or phrase

depends upon reading the whole statutory text [and]

considering the purpose and context of the statute.”).

Although the ESA does not expressly define what

constitutes “habitat” for a listed species, the term

“critical habitat” is founded on the concept that the

area being designated must in fact be habitat – that

it is habitable by a listed species. Thus, for example,

the ESA states that, absent special circumstances,

“critical habitat shall not include the entire geographic

area which can be occupied by the threatened or

endangered species.” 16 U.S.C. § 1532(5)(C). The

clear implication is that to be critical habitat for a

listed species, an area must be one that “can be

occupied” by that species. This directive echoes, and

appears intended to be equivalent to, the directive in

ESA sections 4 and 7 that critical habitat be a subset

of habitat for the listed species.

In the absence of an express statutory definition

of “habitat,” the Court must look to the ordinary

meaning of the word and to the way it is used in the

ESA as a whole. “A fundamental canon of statutory

construction is that, unless otherwise defined, words

will be interpreted as taking their ordinary, contemporary, common meaning.” Perrin v. U.S., 444 U.S. 37,

42, 100 S. Ct. 311, 314 (1979).

The Merriam-Webster Dictionary defines “habitat”

as “the place or environment where a plant or animal

naturally or normally lives and grows,” or, as a secondary definition, “the place where something is commonly

found.” “Habitat,” Merriam-Webster Dictionary (11th

ed. 2016). These dictionary definitions are consistent

with the purposes of the ESA, see 16 U.S.C. § 1531(b),

as Congress selected the word “habitat” to refer to the

ecosystems upon which listed species depend. The

dictionary definitions of “habitat” also are consistent

with the concept of an area that “can be occupied” by

the species. See 16 U.S.C. § 1532(5)(C). The word

“habitat,” as it is used in the ESA, thus indicates that

the area in question must be capable of sustaining a

particular species even if that species does not

currently occupy the area.

Accordingly, when ESA sections 4 and 7 refer to the

designation of “habitat of such species” as “critical

habitat,” they mean a place where a plant or animal

naturally lives and grows; a place that is capable of

sustaining the species; a place that is habitable by the

species.

B. The Fifth Circuit’s analysis ignored the

operative provisions of the ESA and the

plain meaning of the word “habitat.”

The Fifth Circuit panel, as it upheld the designation

of lands in Louisiana as unoccupied critical habitat for

the dusky gopher frog, limited its analysis to the ESA’s

definitions of occupied and unoccupied critical habitat.

See Pet. App. 15a, 18a, 23a-32a (majority opinion

analyzes only sections 1532(5)(A)(i)-(ii)). It did so

even though those lands cannot sustain the frog today

and are not likely to be capable of doing so in the

reasonably foreseeable future without significant

human manipulation. Id.

The ESA’s definitions differentiate between occupied

and unoccupied critical habitat. Occupied critical

habitat, not surprisingly, must be occupied by the

species at the time the species is listed as threatened

or endangered. 16 U.S.C. § 1532(5)(A)(i). It also must

contain physical and biological features that: (1) are

“essential for the conservation of the species”; and

(2) “may require special management considerations

or protection.” Id. Unoccupied critical habitat is lim-

ited to areas that are not occupied at the time of species

listing but nevertheless are deemed “essential for

conservation of the species.” 16 U.S.C. § 1532(5)(A)(ii).

Looking only at these provisions, the Fifth Circuit

determined – wrongly – that the sole criterion the ESA

provides for designating unoccupied critical habitat is

found in section 3(5)(A)(ii), 16 U.S.C. § 1532(5)(A)(ii),

and entails a Service determination that the area is

“essential” for conservation of the listed species. Pet.

App. 15a, 18a, 21a-24a. The Fifth Circuit then ruled

that the ESA does not define “essential,” that the word

is ambiguous, and accordingly that the Service’s

determination that an unoccupied area is “essential”

and so should be designated as critical habitat

(without regard to whether the area is habitable) is

entitled to Chevron deference. Pet. App. 15a, 21a-24a,

citing Chevron, U.S.A., Inc. v. Nat. Res. Def. Council,

Inc., 467 U.S. 837, 843 n.9, 104 S. Ct. 2778 (1984).

The Fifth Circuit found ambiguity by erroneously

focusing exclusively on the word “essential” in section

3(5)(A)(ii) and ignoring the additional criteria for

critical habitat contained in sections 3(5)(C) and 4, 16

U.S.C. §§ 1532(5)(C) and 1533(a)(3)(A)(i). It also

ignored the way the word “habitat” and the phrase

“critical habitat” are used in context in ESA sections 4

and 7, 16 U.S.C. §§ 1533(a)(3)(A)(i) and 1536(a)(2), the

operative provisions of the statute.

Statutory “[i]nterpretation of a word or phrase

depends upon reading the whole statutory text [and]

considering the purpose and context of the statute.”

Dolan, 546 U.S. at 486. “A word in a statute may or

may not extend to the outer limits of its definitional

possibilities.” Id. “[I]f the statute is silent or ambiguous 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.” Chevron, 467

U.S. at 843. The ESA must be read and considered as

a whole to determine the meaning of “critical habitat.”

By their language and structure, ESA sections 4

and 7 make clear that “critical habitat” – including

unoccupied critical habitat – is a subset of a species’

habitat in existence at the time of the species’ listing,

and as such it must be capable of supporting that

species. The ESA’s definition of unoccupied “critical

habitat” in section 3(5)(A)(ii) informs the application

of sections 4 and 7, but also must be read in harmony

with the use of the term “critical habitat” in those

operative sections of the statute. If any ambiguity

exists in the section 3(5)(A)(ii) definition, then the first

source for guidance must be the rest of the statute –

here, primarily the operative provisions of section 4

and section 7 that authorize the designation of

“habitat of such species” as critical habitat and ensure

that the actions of federal agencies are not likely to

result in the “destruction or adverse modification of

habitat of such species which is determined . . . to be

critical.” See 16 U.S.C. §§ 1533(a)(3)(A)(i), 1536(a)(2).

Further, the Fifth Circuit ignored section 3(5)(C),

another element of the ESA’s definition of “critical

habitat” providing that “critical habitat shall not

include the entire geographic area which can be

occupied by the threatened or endangered species,”

except in circumstances determined by the Service.

16 U.S.C. § 1532(5)(C). This provision reinforces the

directive in section 4 and the implication of section 7

that “critical habitat” should be a subset of the listed

species’ habitat – the “geographic area which can be

occupied” by the species. No reasonable reading of

section 3(5)(C) would authorize the designation of

critical habitat that is outside of the geographic area

which can be occupied by a listed species.

The Fifth Circuit dismissed the possibility that

unoccupied critical habitat must be habitable by the

listed species by pointing to differences in the language the ESA uses to define occupied and unoccupied

critical habitat, 16 U.S.C. §§ 1532(5)(A)(i) and (A)(ii).

Pet. App. 23a-24a. Occupied critical habitat must

have “physical and biological features” essential to the

conservation of the species, while unoccupied habitat

must be in “areas” essential for the conservation of the

species. Id. The Fifth Circuit ruled that requiring

unoccupied areas to contain the essential physical and

biological features needed to sustain a listed species

“effectively conflates the standard for designating

unoccupied land with the standard for designating

occupied land.” Id. (emphasis in original).

In so holding, the Fifth Circuit placed too much

weight on the reference to biological and physical

characteristics in section 1532(5)(A)(i), as if this were

the only reference to the suitability of an area to the

listed species to be found in the ESA. To the contrary,

ESA sections 3(5)(C), 4 and 7 plainly state that critical

habitat is a subset of the habitat of a listed species

or a subset of the area that can be occupied by the

species. Occupied critical habitat is distinguished

from unoccupied critical habitat by the fact that it was

occupied by the species at the time the species was

listed. In defining occupied habitat as critical, the

ESA points to the presence of physical and biological

characteristics that are deemed essential to the

conservation of the species, distinguishing “critical

habitat” from “all habitat.” But the ESA, at its base,

requires that both occupied and unoccupied critical

habitat be part of the habitat for a listed species. See

16 U.S.C. §§ 1533(a)(3)(A)(i), 1536(a)(2).

The failure to read the term “critical habitat” with

an eye to the context in which that term is used in

sections 4 and 7 and without referencing the additional criteria for critical habitat found in sections

3(5)(C) and 4 resulted in the Fifth Circuit giving

improper Chevron deference to a Service interpretation of the ESA’s definition of unoccupied critical

habitat. “It is a fundamental canon of statutory construction that the words of a statute must be read

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

overall statutory scheme.” Nat’l Ass’n of Home

Builders v. Defenders of Wildlife, 551 U.S. 644, 666,

127 S. Ct. 2518, 2534 (2007) (internal quotation

omitted). Failure to follow this basic canon resulted in

Fifth Circuit deference to and adoption of a mistaken

Service interpretation that is patently inconsistent

with the plain meaning of the criteria for critical

habitat set out in other ESA provisions.

C. The Service’s determination that lands

may be deemed “essential to the conservation of a species” even though not

habitable by that species now or in the

reasonably foreseeable future is not

entitled to Chevron deference.

Any ambiguity the Fifth Circuit perceived in the

meaning of “critical habitat” derives from isolating

that term and the word “essential” from how “critical

habitat” is used in operative provisions of the statute

and from the plain meaning of the word “habitat.” The

Fifth Circuit should not have moved beyond the first

step of Chevron and should not have extended deference to the Service’s interpretation.

Deference to the Service “is appropriate only where

‘Congress has not directly addressed the precise question at issue’ through the statutory text.” Nat’l Ass’n

of Home Builders, 551 U.S. at 665 (2007) (quoting

Chevron, 467 U.S. at 843).

As this Court has established:

In making the threshold determination under

Chevron, “a reviewing court should not confine itself to examining a particular statutory

provision in isolation.” Rather, [t]he meaning—

or ambiguity—of certain words or phrases

may only become evident when placed in

context . . . It is a fundamental canon of

statutory construction that the words of a

statute must be read in their context and with

a view to their place in the overall statutory

scheme.

Id. at 666 (quoting Food and Drug Admin. v. Brown

& Williamson Tobacco Corp., 529 U.S. 120, 132, 120

S. Ct. 1291, 1300 (2000)) (internal citations omitted).

“A statutory ‘provision that may seem ambiguous in

isolation is often clarified by the remainder of the statutory scheme . . . because only one of the permissible

meanings produces a substantive effect that is compatible with the rest of the law.’” Util. Air Regulatory

Grp. v. Envtl. Prot. Agency, 573 U.S. ___, ___, 134 S. Ct.

2427, 2442 (2014), (quoting United Sav. Assn. of Tex.

v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365,

371, 108 S. Ct. 626, 630 (1988)) (ellipsis in original).

Here, congressional intent is clear that critical

habitat is a subset of the habitat of a listed species. 16

U.S.C. §§ 1532(5)(C), 1533(a)(3)(A)(i), 1536(a)(2). The

Fifth Circuit never considered those provisions. If it

had done so, it would not have erroneously claimed

that “there is no habitability requirement in the text

of the ESA.” Pet. App. 23a.

Consistent with the holdings of this Court, the Fifth

Circuit should not have confined itself to examining a

particular statutory provision in isolation, as the

definition of unoccupied critical habitat in section

3(5)(A)(ii) that may otherwise appear ambiguous in

isolation is indeed clarified by the remainder of the

statutory scheme, namely sections 3(5)(C), 4 and 7.

See Food and Drug Admin., 529 U.S. at 132; Util. Air

Regulatory Grp., 573 U.S. at __, 134 S. Ct. at 2442.

The only potential meaning of unoccupied critical

habitat, as defined by ESA section 3(5)(A)(ii), that is

also compatible with the rest of the ESA is that critical

habitat – including unoccupied critical habitat – must

be habitable and thus capable of supporting the species

for which it is designated. See Util. Air Regulatory

Grp., 573 U.S. at __, 134 S. Ct. at 2442. In light of the

statute’s unambiguous directive that critical habitat

be habitable, the Fifth Circuit should have stopped

after the first step in its Chevron analysis.

In any event, the Fifth Circuit’s Chevron step 2

analysis is equally flawed, as it erred in endorsing

the Service’s unreasonable exclusion of habitability

from the criteria for critical habitat. The ESA may

not define the term “essential for the conservation of

the species,” but it has placed boundaries on what may

be considered “essential”; Congress has clearly stated

that critical habitat must in fact be habitable. See

16 U.S.C. §§ 1532(5)(C), 1533(a)(3)(A)(i), 1536(a)(2).

“Even under Chevron’s deferential framework, agencies

must operate ‘within the bounds of reasonable interpretation.’” Util. Air Regulatory Grp. 573 U.S. at ___,

134 S. Ct. at 2442 (quoting City of Arlington, Tex. v.

Fed. Commc’ns Comm’n, 569 U.S. 290, 296, 133 S. Ct.

1863, 1868 (2013)). Chevron “directs courts to accept

an agency’s reasonable resolution of an ambiguity in a

statute that the agency administers.” Mich. v. Envtl.

Prot. Agency, 576 U.S. __, __, 135 S. Ct. 2699, 2707

(2015). But an agency’s reading of a statute must still

remain within the bounds of reasonable interpretation. Id.

Reading the ESA to allow an uninhabitable area to

be designated as “critical habitat” strays far beyond

the bounds of reasonable interpretation and cannot

survive judicial scrutiny. See id. (EPA wrongly

interpreted the word “appropriate” in the Clean Air

Act provision as allowing it to ignore costs of pollution

controls).

There are limits to the meaning of “essential,” and

so to the Service’s discretion. Here, the Service

designated as “essential” an area that currently provides no conservation benefit to the dusky gopher frog

and will not do so in the future. To deem an area

“essential” to a species that has no connection to the

areas in Mississippi that are currently occupied by the

species and no foreseeable ability to sustain the

species goes beyond the bounds of reason. Even where

Chevron deference does apply, it has limits, and those

limits were exceeded here. See id.

II. Designating areas that are not habitable

by a listed species as “critical habitat”

harms the development and operation of

the nation’s energy infrastructure.

Critical habitat designation can directly constrain

the location of energy generation, transmission, or

distribution projects, impose permitting delays, cause

higher installation and operating costs, and increase

financing costs. This is particularly true if there is no

requirement that the lands in question possess

suitable characteristics to sustain listed species, as

there is no way a project proponent could foresee and

plan for the designation. This, in turn, increases the

cost of energy production and transmission, a cost that

is passed on to consumers unless the company that is

developing or operating the affected facilities is constrained by contract or regulation from doing so. The

practical implications of the Fifth Circuit’s ruling are

evident when applied to the development, operation

and maintenance of the nation’s electric energy

infrastructure.

A. The electric energy industry in the

United States is investing heavily in

new generation, transmission and

distribution facilities and in enhancing

the nation-wide electric grid.

The United States is in the midst of an evolution in

its electric energy infrastructure. The means of

generating electricity have been changing, particularly in the last decade, with planned and completed

retirement of a significant number of conventional

(mainly nuclear and coal-fired) power plants, the

development of new renewable (wind, solar and other

sources) and natural gas-fired generation, and noticeable growth in distributed energy resources (rooftop

solar, small-scale wind, and net metering), energy

storage (battery facilities and electric vehicles) and

efficiency. These trends are expected to continue in

the coming years.

The U.S. wind industry installed 7,017 megawatts

(“MW”) of new electric energy generating capacity and

repowered 2,136 MW of existing capacity in 2017,

bringing the total installed capacity for wind energy

generation in the United States to 89,077 MW, or more

than 89 gigawatts (“GW”).4 An additional 28,668 MW

of wind generating capacity was under construction or

in advance development at the end of 2017.5

The U.S. Solar industry installed 10,608 MW in

2017 and now has over 53 GW of total installed solar

generating capacity.6 Solar energy has ranked first or

second in new electric generating capacity additions in

each of the last five years.7

Billions of dollars are also being invested in the

nation’s electric transmission system – over $20 billion

in 2016 and more in 2017.8 The factors driving these

investments include enhancing reliability, grid resiliency and modernization, relieving market congestion,

developing smarter energy infrastructure, improving

economic and market efficiency, and expanding the

transmission system to integrate renewables into an

evolving generation mix. The industry also is making

significant investments in a more dynamic and secure

transmission system. Consistent with federal and

state policies, transmission projects are planned through

the use of open and transparent processes that include

analysis and consideration on a comparable basis of

American Wind Energy Association, U.S. Wind Industry

Fourth Quarter 2017 Market Report, available at: http://awea.

files.cms-plus.com/FileDownloads/pdfs/4Q%202017%20AWEA%

20Market%20Report%20Public%20Version.pdf.

Id.

Solar Energy Industry Association, U.S. Solar Market

Through 2017: Key Takeaways, available at: https://www.seia.

org/solar-industry-research-data.

Id.

Edison Electric Institute, available at: http://www.eei.org/

issuesandpolicy/transmission/Documents/bar_Transmission_Inv

estment.pdf.

proposed transmission solutions and alternate, nontransmission solutions. Justification for new-build or

upgrades of existing facilities has to be provided to the

appropriate regulatory and stakeholder groups.

As discussed below, the understanding of “critical

habitat” endorsed by the Fifth Circuit puts these

investments at risk. Energy infrastructure projects –

both new construction and enhancement of existing

facilities – take years to plan and execute. Once

constructed, they typically remain in service for

decades – 30 or 50 years, or more. Thus, a key

consideration in planning and executing these projects

is not only recognizing and designing the project to

avoid and minimize current potential adverse environmental impacts, but also anticipating and planning

for potential changes in regulatory requirements

during project development and the operating life of

the facility.

The Fifth Circuit has endorsed a regulatory wild

card; it is impossible for an energy project developer to

anticipate and plan for the costs and delays that are

likely to result from the designation of an area that

cannot sustain a listed species, now or in the reasonably foreseeable future, as critical habitat for that

species. The resulting uncertainty can cause needed

energy projects to be delayed or cancelled. And should

projects proceed despite being affected by the designation of uninhabitable “critical habitat,” the resulting

increased costs will likely be passed on to the

residential, commercial and industrial consumers of

electricity, with no discernible biological benefit from

“protecting” an area that cannot sustain the species.

B. Energy projects that could have an

adverse effect on critical habitat face

significant costs, likely delays, and

higher operating costs.

The regulatory impact of a critical habitat designation arises under ESA section 7(a)(2), which requires

consultation if some discretionary federal action may

affect a listed species or its critical habitat. See 16

U.S.C. § 1536(a)(2). When an energy facility is located

on or crosses federal lands, requires a federal permit,

or receives federal funding, one or more discretionary

federal actions are likely to be required for the facility

to be developed and additional discretionary federal

actions may occur over the operating life of the project.

A federal agency also may retain sufficient discretionary control during the operating life of the facility that

it is obligated to reinitiate ESA consultation if newly

designated critical habitat may be adversely affected

by operation and maintenance of the facility. See 50

C.F.R. § 402.16(d).

It is common for new and existing energy facilities

to prompt one or more of the potential triggers for ESA

section 7 consultation: federal lands; federal permits;

or federal financing. If critical habitat is present in

any of these scenarios, ESA section 7(a)(2) obligates

the federal action agency to conduct additional review.

If this review results in a finding that the activity may

affect critical habitat, then the agency must complete

a formal consultation with the Service before the

federal action can proceed. 50 C.F.R. § 402.14(a). The

consultation process includes preparation of a biological assessment by the project proponent and the

federal action agency, see 50 C.F.R. §§ 402.12, 402.14(c),

and the issuance of an often lengthy and complex

biological opinion by the Service, imposing a myriad

of requirements to reduce impacts. See 50 C.F.R.

§§ 402.14(g) & (h). This additional review and the

requirements imposed can result in significant

increases in the time and cost for the affected project

and changes in the project to minimize and mitigate

for habitat impacts.

A few examples amply demonstrate the challenge

the ESA can pose for energy projects. In many parts

of the country, it is virtually impossible to site

electrical infrastructure of any significant length or

size and avoid stream crossings and wetlands impacts.

If construction includes what the U.S. Army Corps of

Engineers (the “Corps”) has classified as dredging or

filling of waters of the United States (“WOTUS”), then

a permit is needed from the Corps under section 404

of the Clean Water Act (“CWA”). 33 U.S.C. § 1344.

Many linear projects require section 404 permits for

potential WOTUS impacts at multiple crossings along

their routes. A utility scale renewable energy project

likewise may include a number of Corps-regulated

drainages within its project area. The issuance of a

section 404 permit triggers the ESA’s consultation

requirement, which obligates the Corps to consider the

potential effect of the activity on critical habitat. See

16 U.S.C. § 1536(a)(2).

The Corps has developed a streamlined Nationwide

Permit (“NWP”) program under CWA section 404 “to

regulate with little, if any, delay or paperwork certain

activities having minimal impacts.” 33 C.F.R. § 330.1(b).

EWAC members regularly rely on the NWP program

for expedited authorization to construct, operate,

and maintain their facilities. For example, NWP 12

authorizes utility line work with limited impacts on

wetlands and waterbodies:

Activities required for the construction,

maintenance, repair, and removal of utility

lines and associated facilities in waters of the

United States, provided the activity does not

result in the loss of greater than 1/2-acre of

waters of the United States for each single

and complete project.

Issuance and Reissuance of Nationwide Permits, 82

Fed. Reg. 1860, 1985 (Jan. 6, 2017).

An activity must adhere to a set of general conditions to be authorized under the NWP. In most

cases the NWP program allows activities to be “selfcertified” without any involvement by the Corps.

General Condition 18, however, requires that nonfederal permittees (such as EWAC members) notify

the Corps if any designated “critical habitat might be

affected or is in the vicinity of the activity, or if the

activity is located in designated critical habitat,” so

that the Corps can meet its obligations under ESA

section 7(a)(2). The Corps has expressly stated that

“might affect” is a “low reporting threshold” to trigger

notification. 82 Fed. Reg. at 1954.

If the notification requirement of General Condition

18 is triggered, the activity cannot proceed until the

Corps has completed its ESA section 7(a)(2) obligations. 33 C.F.R. § 330.4(f)(2). Thus, a project proponent

is thrown into a delayed permitting pathway if critical

habitat might be affected or is within the vicinity of

its NWP activity. Id. If the Service does conclude

that adverse effects are likely and requires formal

consultation, the Service’s Biological Opinion likely

will require the implementation of measures that add

further costs and delays, defeating the NWP objective

of regulating “with little, if any, delay or paperwork.”

33 C.F.R. § 330.1(b).

Even where the federal nexus arises out of a small

portion of a project (for example, a single stream

crossing), ESA section 7 analysis can sweep in portions

of a project that do not have a federal nexus. While

the Corps focuses its 404 permitting decision on the

area around NWP-regulated dredging or fill, the

Service will look beyond those areas and evaluate

the entire project for effects to critical habitat. See

U.S. Fish and Wildlife Service and National Marine

Fisheries Service, Endangered Species Consultation

Handbook, Procedures for Conducting Consultation

and Conference Activities Under Section 7 of the

Endangered Species Act (“Section 7 Consultation

Handbook”) at 4-18 (March 1998) (“For example

(Figure 4-6), if the proposed action is a wetland fill

(requiring a federal permit) to accommodate access to

a proposed development (the actual area of impact to

the species), then the development is included in the

action area.”) (“Section 7 Consultation Handbook”).9

The Service’s broad analysis effectively means that a

small federal activity (involving less than ½ acre of

dredge or fill) can federalize the entire project for

purposes of the Service’s review under ESA section

7(a)(2).

Another example is renewable energy projects sited

on federal lands and linear facilities that cross those

lands. The federal Bureau of Land Management

(“BLM”), an agency within the Department of the

Interior, manages about 245 million acres in 12

western states. In several western states, federal

lands managed by BLM and other federal agencies

comprise the vast majority of the land area, making it

The Service’s ESA Section 7 Consultation Handbook (March

1998) is available at: https://www.fws.gov/endangered/esa-libr

ary/pdf/esa_section7_handbook.pdf.

very difficult to design a project that avoids interacting with federal lands. The siting and construction of

new infrastructure, as well as the operation and

maintenance of existing infrastructure, on federal

lands are subject to rights-of-way (“ROW”) obtained

from the relevant federal agencies. See 43 U.S.C.

§ 1761. BLM has issued thousands of miles of ROWs

for electricity transmission and distribution lines

and currently manages almost 16,000 authorizations

for electricity transmission and distribution facilities

on federal lands.10 The development and operation of

renewable energy generation projects (wind and solar)

on federal lands are subject to the same ROW requirements. The last decade in particular saw a number of

commercial wind and solar energy projects being

permitted and constructed on federal lands. EWAC

members will continue to develop and improve electricity generation distribution and transmission facilities

on federal lands in the future in order to ensure

delivery of safe and reliable electric power across

America.

Similar to section 404 permits, ROW grants are

discretionary federal actions, and therefore trigger the

action agency’s obligation to consult with the Service

under the ESA. 16 U.S.C. § 1536(a)(2). The action

agency must evaluate the effects of granting the

ROW on listed species and critical habitat. 50 C.F.R.

§ 402.02(c). If the ROW has the potential to affect

listed species or critical habitat, the approval of the

ROW is typically conditioned on a suite of measures,

to be undertaken by the entities, that are designed to

John Ruhs, Acting Deputy Director for Operation, BLM,

Statement before the Senate Committee on Energy and Natural

Resources (September 19, 2017), available at: https://www.doi.

gov/ocl/electric-infrastructure-vegetation-management.

minimize and mitigate for these effects. See 50 C.F.R.

§ 402.14(h) (biological opinions). These conservation

measures may force redesign of a project and impose

restrictions on ongoing operations and maintenance.

As previously noted, energy infrastructure projects, once established, are likely to remain on the

landscape for several decades. In many instances,

ESA-compliance is a continuous task and does not

end after construction. ROWs and licenses may

require renewal and modifications over the course of

the infrastructure’s lifespan, triggering evaluation of

potential impacts on critical habitat designated after

the initial ROW or license was approved. Existing

federal authorizations also may include provisions

requiring that consultation be re-initiated should new

critical habitat be designated that may be affected by

the authorized action. See 50 C.F.R. § 402.16(d)

(consultation must be reinitiated where federal discretionary involvement or control has been retained and

newly designated critical habitat may be affected).

Thus, there are several ways that existing energy

infrastructure could be affected by the designation of

areas that cannot sustain a species as “critical habitat”

for that species.

Critical habitat designations also can create

conflicts with other federal standards. For example,

the North American Electric Reliability Corporation

(“NERC”) requires vegetation management near regulated transmission lines to minimize risk of wildfires

and outages caused by vegetation contacting or

growing too close to lines. See NERC FAC-003-4,

Transmission Vegetation Management (October 1,

2016).

For similar reasons, utilities also practice

vegetation management near transmission and distribution lines that are not subject to NERC standards.

These required and voluntary vegetation management

activities may trigger ESA-related issues if the

vegetation along part of a route is within designated

critical habitat for a listed species. The activities

also may have a federal nexus such as a requirement

for a 404 permit or federal land management agency

approval prior to conducting vegetation management.

Desired vegetation conditions for the listed species

also may conflict with NERC requirements in some

cases. This could occur, for example, in riparian corridors where tall trees or shrubs could be an essential

feature of critical habitat for a listed species, yet

NERC standards may not allow taller vegetation near

regulated lines. To resolve the conflict between ESA

and NERC standards, the utility could be required to

conduct surveys to demonstrate species absence prior

to initiating work, comply with timing restrictions and

provide offsetting mitigation, even though – under the

criteria approved by the Fifth Circuit – the area is

unoccupied and uninhabitable by the species in question.

Finally, even where an EWAC member’s facility is

located entirely on private land and does not require

any federal permits (and therefore does not trigger the

obligations of ESA section 7(a)(2)), financing can be

adversely impacted if critical habitat occurs within or

adjacent to the facility’s footprint. Financiers will

often impose more expensive terms for financing based

on the existence of critical habitat because of the

potential that a future federal authorization or permit

NERC standard FAC-003-4 is available at: https://www.

nerc.com/pa/Stand/Reliability%20Standards/FAC-003-4.pdf.

could be needed, triggering ESA section 7 consultation, resulting in unanticipated costs.

Ultimately, the increased development and operating costs and the impacts of project delays connected

to critical habitat for listed species are borne by

electric power producers, consumers and taxpayers.

Even entirely private projects suffer economic consequences from critical habitat, through adverse impacts

on private financing.

C. Energy project developers seek to

avoid or minimize the impact of new

electricity generation, transmission,

and distribution infrastructure within

critical habitat.

In the interest of being good stewards of natural

resources, and recognizing the additional costs and

delays that are likely to result from siting projects in

critical habitat, EWAC’s members generally seek to

avoid affecting critical habitat and to minimize those

impacts that are unavoidable. Electricity generation

locations and transmission routes are carefully

examined, weighing a host of factors that routinely

include avoiding and minimizing impacts to sensitive

habitats and other natural resources. Indeed, EWAC

members often go to great lengths to purposely route

and site facilities in unoccupied (and uninhabitable)

and often degraded areas, specifically to avoid conflicts

with listed species and their habitat.

If routes or potential sites cannot avoid areas containing listed species or critical habitat, then potential

impacts on those areas can be evaluated, minimized,

and mitigated. During project design and ESA

consultation the effects on critical habitat often are

roughly estimated based on critical habitat maps.

This initial screening process is typically done at a

coarse scale, particularly because electric transmission and distribution systems extend over great

distances.

The wind energy industry developed, in coordination with the Service and other stakeholders, the

Land-Based Wind Energy Guidelines (“Guidelines”).12

These Guidelines recommend a tiered approach to

wind energy development starting first at landscape

scale site-screening and proceeding with each tier to

more site-specific data collection such as wildlife

surveys. This process is designed to screen out potential sites where impacts on species of concern cannot

be mitigated. See Guidelines at 9 (General Framework

of Tiered Approach). Similarly, transmission and distribution companies follow internal siting procedures

to identify and address potential impacts and to

optimize the time and cost to build a route.

The result of the screening process is that EWAC

members can and often do design and plan facilities to

avoid or minimize impacts to areas known to support

listed species, including occupied and unoccupied

critical habitat. For example, a transmission line or

wind or solar energy facility may be sited, when

feasible, to avoid wooded areas that are suitable for

listed bat species or riparian habitat that supports

listed salamanders. Once decisions are made about

routes and facility locations, it normally takes several

years to acquire or access property, obtain permits,

and construct the facilities. Many of the required

steps for developing a project hinge on site-specific

U.S. Fish & Wildlife Service, Land-Based Wind Energy

Guidelines (March 23, 2012), available at: https://www.fws.gov/

ecological-services/es-library/pdfs/WEG_final.pdf.

characteristics and land use requirements. Decisions

regarding facility siting and route selection, including

design changes, rerouting a segment or relocating

facilities, become increasingly expensive and challenging to revisit as the multi-year development process

proceeds.

D. Extending ESA “critical habitat” protection to lands that cannot sustain a

listed species threatens to disrupt the

development and operation of the

nation’s energy infrastructure.

If the Service can designate areas that are

uninhabitable by a listed species as “critical habitat”

subject to all of the protections of the ESA, that

impacts the development, operation, and maintenance

of the nation’s energy infrastructure. Further, all of

the care a project proponent takes to avoid sensitive

habitats will be for naught if the Service can interject,

at any point in the development timeline, a determination that lands that do not contain the physical or

biological features necessary to sustain an ESA-listed

species nevertheless are “unoccupied critical habitat”

and subject to the full protections afforded by the ESA.

Similar pressures come to bear on operating facilities. The designation of “unoccupied critical habitat”

within the footprint of an existing wind or solar energy

facility or overlapping the route of existing transmission

or distribution lines is likely to impose unanticipated

costs and may force changes in operation and maintenance practices. In addition to the impact on normal

operations of the facilities, it is routine for changes

to be made to existing facilities during their long

operating lives, and those changes can trigger the

same federal nexus as a new project. Designating

uninhabitable areas as “critical habitat” for a listed

species can disrupt those projects in a myriad of ways.

A project developer or facility operator simply cannot

anticipate or develop contingencies for the entirely

unpredictable risk that land which is not habitable by

a listed species can nevertheless be declared by the

Service to be “critical habitat,” with attendant regulatory consequences.

Returning to the example of the Corps-issued NWP

discussed in Section II.B. above, if the Service can

designate unsuitable, and indeed uninhabitable, land

as critical habitat, then the frequency with which the

notification requirements of the NWP’s General

Condition 18 are triggered will increase drastically.

Furthermore, these areas would have no distinguishable characteristics indicating they may support a

particular species, making it impossible for project

proponents to plan ahead to avoid certain areas since

anything could be fair game for a critical habitat

designation. For example, consider a wind energy

project with a layout carefully designed to avoid

woodland habitat that may be suitable for listed bat

species and has access road crossings requiring NWP

authorization from the Corps. If the project is sited on

former woodlands that were logged long ago and

converted to other uses, it would suddenly be at risk if

the Service were allowed to designate its site as

“unoccupied critical habitat” on the premise that the

land could one day revert back to forest and grow into

suitable bat habitat. Under this scenario, even though

the stream crossing regulated by the Corps is outside

the newly designated critical habitat, if the project has

not yet begun construction then the Corps could be

forced to reinitiate consultation, as the Service’s

expansive review could extend to effects on the former

woodlands where turbines will be located. See Section

7 Consultation Handbook at 4-17 – 4-18; 50 C.F.R.

§ 402.16(d) (consultation must be reinitiated where

federal discretionary involvement or control has been

retained and newly designated critical habitat may be

affected).

Or consider the transmission line route that

carefully avoided salamander habitat on federal lands.

If the Service later designated critical habitat near

streams that have been converted from native vegetation to agriculture but could, in theory, one day be

restored to support listed salamanders, the route could

suddenly be subject to section 7(a)(2) requirements for

any subsequent discretionary federal actions.

In both cases, infrastructure that had been sited

with the specific objective of avoiding sensitive habitat

suddenly and unexpectedly would overlap critical

habitat. There is no way the project developer could

anticipate that this could or would occur, potentially

years into the development process or after the project

has been constructed and begun operating. No preconstruction survey could reliably identify or quantify

this risk and any attempt to do so would be a highly

speculative, likely inaccurate and costly guess.

It becomes that much harder (indeed, nearly impossible) for all parties to evaluate future financial risk if

the Service has the power to designate land where a

project has been proposed or that is occupied by an

existing facility as critical habitat even though the

land lacks the physical or biological features needed to

sustain the listed species. Project developers would no

longer be assured of any benefit from avoiding the

habitat of listed species in favor of uninhabited and

uninhabitable areas. EWAC members simply could

not factor such possibilities into their siting and

routing decisions and it would be extremely difficult

for them to budget for these uncertainties. This affects

not only the potential cost of project development, but

also the designation of critical habitat affecting an

existing project also can be expected to increase its

operating costs. As noted in prior sections, these

increased costs are likely to be passed on to electricity

consumers in the form of higher rates, although for

electrical generation projects that are operating under

long-term power purchase agreements the costs may

be unrecoverable by the facility owner.

Moreover, as the Service and the Fifth Circuit

recognized, the designation of critical habitat could

decrease the asset value of any affected electrical

infrastructure, due to the stigma of the facility having

new, and likely undefined, obligations due to the new

critical habitat designation. See Pet. App. 13a (“a

property that is designated as critical habitat may

have a lower market value than an identical property

that is not within the boundaries of critical habitat due

to perceived limitations or restrictions.”). It could

devalue properties where assets have been retired or

are proposed for retirement, as well as land that was

purchased in anticipation of future needs and is

offered for sale when plans change.

These outcomes are unreasonable, as they will cause

delay and increase costs and could prevent projects

from being built or maintenance of existing infrastructure, disrupting access to reliable and affordable

electric power, all while providing little or no benefit

for listed species.

CONCLUSION

For the foregoing reasons, the judgment of the Court

of Appeals for the Fifth Circuit should be reversed.

Respectfully submitted,

STEVEN P. QUARLES

NOSSAMAN LLP

1666 K Street, NW

Suite 500

Washington, D.C. 20006

(202) 887-1400

BROOKE M. WAHLBERG

NOSSAMAN LLP

816 Congress Avenue

Suite 970

Austin, TX 78701

(512) 651-0660

SVEND A. BRANDT-ERICHSEN

Counsel of Record

NOSSAMAN LLP

601 Union Street

Suite 5305

Seattle, WA 98102

(206) 395-7632

sbrandterichsen@nossaman.com

Counsel for Amicus Curiae Energy and

Wildlife Action Coalition

April 30, 2018

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