# Amicus Curiae Brief — National Ass'n v. Defenders of Wildlife

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0293%3A32

## Record

- **Collection:** Supreme Court brief
- **Document type:** Amicus Curiae Brief
- **Published:** January 1, 2007
- **Citation:** 551 U.S. 644

## Text

=
4

Nos. 06-340, 06-549
a a aS,
IN THE

Supreme Court of the United States

NATIONAL ASSOCIATION OF HOME BUILDERS, ef ai.

Petitioners,
Vv.

DEFENDERS OF WILDLIFE, ef al..
Respondents.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.

Petitioner,
V.

DEFENDERS OF WILDLIFE, ET AL..
Respondents.

On Writ of Certiorari to the United States
Court of Appeals for the Ninth Circuit

BRIEF OF AMICI CURIAE
HIGH PRODUCTION HOMEBUILDERS
IN SUPPORT OF PETITIONERS

CARTER G. PHILLIPS
STEPHEN M. NICKELSBURG*
Eric A. SHUMSKY

R. JUGE GREGG

BRIAN E. NELSON

SIDLEY AUSTIN LLP

1501 K Street, N.W.
Washington, D.C. 20005
(202) 736-8000

Counsel for Amici Curiae

February 20, 2007 *Counsel of Record

I PAA
WiLSON-EPES PRINTING Co., INC. — (202) 789-0096 -— WASHINGTON, D.C. 20002

QUESTION PRESENTED
Amici will address the following question:

Whether, assuming that § 7 of the Endangered Species Act
applies to non-discretionary agency action, this provision is
nonetheless bounded by requirements of proximate causation
that prevent interference with the delegation to Arizona of
permitting authority under § 402 of the Clean Water Act.

(i)

TABLE OF CONTENTS

GIF SFOS 6 IIIS BCP vscccccccsecvcenresesonenstecnnnienecsssetors
FAR Se RT Re 8 I ccccctcrcccecsesocssvcceensssseeneenconsens
INTERESTS OF AMICT CURIAE...............esscsssssssscoseeses

Il.

Ill.

THROUGHOUT THE LAW, PROXIMATE
CAUSE — NOT MERE BUT-FOR CAUSE - IS
THE DEFAULT RULE OF CAUSATION ............

A.To Prevent Limitless Liability, Proximate
Cause Is The Rule At Common Law...................

B. Proximate Cause Is The Default Rule For Fed-
ETERS AL eer NOES RR CO CRON

SECTION 7 OF THE ESA AND ITS IMPLE-
MENTING REGULATIONS INCORPORATE
BASIC PRINCIPLES OF PROXIMATE CAUSE
PDTED PUI ATIEBS EY cecsecccecocsecssnsecsssevsoresscones

A. This Court Has Interpreted ESA § 9 As Re-
GUNTUR PUORMS CBD ..0000ccccccccesercessevssscseerees

B. Section 7 Of The ESA Likewise Requires
EE ET ITE ee

THE DECISION BELOW IMPROPERLY
ABANDONED TRADITIONAL CONCEPTS
OF PROXIMATE CAUSATION AND EM-
PLOYED AN EXTREME VERSION OF BUT-
Fe Ne TIT accctienissestnencsnvecenaninininititenianetiinne

Ua ncierniiebvinnininiinnsieniideapiiainienneninbienisiaiiniatiiuensints

Page

j
iV

l

iV

TABLE OF AUTHORITIES
CASES Page
Anza v. Ideal Steel Supply Corp., 126 S. Ct. 1991
SSE desiitduinidciesscdbiabiiaiiiiicidlelasanisteiaiaihiadselauiiisiatn 11, 12,24
Archer v. Warner, 538 U.S. 314 (2003).........c000000. 24

Associated Gen. Contractors of Cal., Inc. v. Cali-
fornia State Council of Carpenters, 459 U.S.

PO acctcittitateveiteaniiiiiestiatisitiiieiiaiaiesi 9,10, 11, 21
Babbitt v. Sweet Home Chapter of Cmtys. for a

Great Or., 515 U.S. 687 (1995)... cessseeeeseeees passim
Benefield v. Exxon Corp., 959 F.2d 805 (9th Cir.

SUTTaTdicbiieshcauitiaciesleshiadiidliidiiablanhesaiianiadentinnamenonaneinene i)
Bennett v. Spear, 520 U.S. 154 (1997)... ceeeeeeeeee 3, 25
Brower v. County of Inyo, 489 U.S. 593 (1989) ..... 18
County of Westchester v. Town of Greenwich, 76

Fe EA ITI teccichcaniieaiedeniiininiecanitinacian 15
Defenders of Wildlife v. EPA, 420 F.3d 946 (9th

eae sesicissenineniinccensesupesamibietnlaaianiaiian 6, 15, 20, 21, 26
Department of Transp. v. Public Citizen, 541 U.S.

SETI TElipchsinkiesesibisichdiensseceiidubanatsisapemeeininiinnigin 13
Dura Pharms., Inc. v. Broudo, 544 U.S. 336

[EUPTIT iicelnititiiesteedhidinstidtuinderiensconnemepeduiamutunteenitiesacien 11, 12
Exxon Co., U.S.A. v. Sofec, Inc., 517 U.S. 830

EU IETEitiihaiebceisdnidnisterteneiaveenindisincnmtandniningiiiaciinniubicniass 9,11
Florida Audubon Soc’y v. Bentsen, 94 F.3d 658

Ss Se I caseiancictivennetnninrsennninteneisienaienammnianeets 23

Glass Packaging Inst. v. Regan, 737 F.2d 1083
(D.C. Cir. 1984), overruled in part on other
grounds as explained in Hazardous Waste
Treatment Council v. EPA, 861 F.2d 277 (D.C.

ae eT hinscesdabeciephinicanistatantinstghscrnceiiiesicetinbaedaluebipiaiuiniitis 26
Holmes v. Securities Investor Prot. Corp., 503

ee ciccesscsnctdessinebiliitieinsditepdinaiinindinibe 10, 12, 24
Loggerhead Turtle v. County Council, 92 F.

Supp. 2d 1296 (M.D. Fla. 2000)............. cesses 26

Vv

TABLE OF AUTHORITIES — continued

Page
Lujan v. Defenders of Wildlife, 504 U.S. 555
PU Ua iecnicanissiepuissaniintanaageiiapitiisiaienetanaiiansdadsaaalieaatilie 23
Metropolitan Edison Co. v. People Against Nu-
clear Energy, 460 U.S. 766 (1983)........ 13, 14, 19, 22
National Wildlife Fed’n v. Hodel, 839 F.2d 694
CE Ce Fie csinicncensesicnsemsseiinnnintemiinaiiasauntiaty 17
Natural Res. Def. Council, Inc. v. EPA, 822 F.2d
a EN NT THe 27
Siggers v. Barlow, 906 F.2d 241 (6th Cir. 1990)... 24
Strahan v. Coxe, 127 F.3d 155 (1st Cir. 1997) ....... 26
Southern Pac. Co. v. Darnell-Taenzer Lumber
Ca, BOS UB. F314 CAGE) nccesrccsscecansess 9,10, 11,21, 24
TUM V. Fee, SST UE, 159 CPG TI ccccccecstnctcncenscnnesnns 14
United States v. Wells, 519 U.S. 482 (1997)........... 8
United States v. West of Eng. Ship Owner's Mut.
Prot. & Indem. Ass'n (Lux.), 872 F.2d 1192
CNG, Fe Rc esnvvnssinnisscinsciinicstioniiiaiiiitiadaindusmmsliebianaa 15
Waters-Pierce Oil Co. v. Deselms, 212 U.S. 159
CIR ccerccentnctcisetstitnsisihinsnieiedeiiuaiaipiiidamiaaaiie 18
STATUTES
National Housing Act of 1934, ch. 847, 48 Stat.
1246 (codified as amended at 12 U.S.C. § 1701
68 BOM.) .ccccccsnssnepnenssiencsabinctininaiintaapnpeibinanenniamnttte ]
- Housing Act of 1961, Pub. L. No. 87-70, 75 Stat.
DAD . xconccecuninaniestnnsnutiiaanisiadinighiiimneaadaaaias ]
Department of Housing and Urban Development
Act of 1965, Pub. L. No. 89-174, 79 Stat. 667 .... ]
BS UB. 6 EG sccceccnsiscittinincansconintiisuaiinendeniaiiieniains 1]
BG UBC. © BS Ci re ccercccccniisssininsiiisuminiisclaniiiaitiinsi 18
© BE cscnsnnsntcvcnemncsncnhiidiainia 3, 8,14, 17, 18
© CED nnececnssevinssinicitssissaaiiiiiabeiniiliiditaaiatiad 4,15, 25
OB EDO cxcccnnvensctsniianssissitiliitiiaiiadelabiaabieniaan 4

vi
TABLE OF AUTHORITIES - continued

Page

na Hr UII iosiscssienicinseissientecehiteneiatniaieitasiate 11
ip aTIITTI hssustiorssctnininiimnpitsiedinensenienianiinssienens 11

EE ITTIGT Ts IIIT cli icdttrduiierinigiinatieaseeinsientieindinibaneitieass l
i helene tebe deiepneectnanenacinstnbenitates 2

I neh STII inrcssithchiaiedeenesiictninerastnratntctiennsionitianttions l
Se eaETEIEcicenichicteahietieitiniomeenerivensisindsinenaniunes 13,14

iT issthaiaidsisipandaiiniatneaiuiniateanceataiiens l
I PII nicer tlesiatnniclinieatasiiniatiaiai 25
a 19, 20
SOO tistchicisteesecciinntinnsicniinpeasen wnenemngaigets 20

SITE ciktcldeendpicindenhiesibsmestunnienetnsiematnenemanaes 19

SED tasinictincniinenaeanmasnenieianienpunenins 4,19, 20

Interagency Cooperation — Endangered Species
Act of 1973, as amended, 51 Fed. Reg. 19,926,
PRR e GID Dh, BOIID cccccccscnsenseenseccnpnnnsasse 4, 14, 20, 23
Final Rule to Remove the Arizona Distinct Popu-
lation Segment of the Cactus Ferruginous
Pygmy-owl From the Federal List of Endan-
gered and Threatened Wildlife, 71 Fed. Reg.

I Ik ST ncersnenstennisnmnseninntiaenconnmes 27
LEGISLATIVE HISTORY
H.R. Conf. Rep. No. 96-697 (1979), reprinted in
eee AOE ccpncstcsicsinnisteneseenevicesiinnianienn 18

SCHOLARLY AUTHORITIES

Charles Fisk Beach, Jr., A Treatise on the Law of
Contributory Negligence or Negligence as a

CC , os 8
Dan D. Dobbs, The Law of Torts (2001)................. 10
William B. Hale, Handbook on the Law of Torts

tS ee ee )

W. Keeton et al., Prosser and Keeton on the Law
es 9. 10. 19, 20

Vii
TABLE OF AUTHORITIES — continued
Page
Robert V. Percival et al., Environmental Regula-
tion: Law, Science, and Policy (2d ed. 1986)...... 15
1 Thomas G. Shearman & Amasa A. Redfield, A
Treatise on the Law of Negligence (Sth ed.

Se ceadiniesechctiaieiiehieienaciainaaehihetaiadillitiatia daa 8
1 J.G. Sutherland, A Treatise on the Law of Dam-
I cerrntetnsrreteenmeteemeerentinnntenimninein 10
OTHER AUTHORITIES
Cambridge Dictionary of American English
I aaa a a aa 17

Restatement (Second) of Torts (1965) ...9, 15, 22, 23, 24
Restatement (Third) of Torts: Apportionment of
EIN CTI cicstiiciansiipnciciienbucindibibiialinieuteenineabisteten 9
Roget's Il: The New Thesaurus (1988) .................+. 17
Arizona Ecological Servs. Field Office, FWS,
Cactus Ferruginous Pygmy-Owl (Jan. 2003), at
http://www.fws.gov/southwest/es/arizona/
Documents/Redbook/Cactus%20Ferruginous
%20Py gmy%20ow pdf ..............ccsecsceeseeceeseeeeeeees 27
Arizona Ecological Servs. Field Office, FWS,
Cactus Ferruginous Pygmy-Owl Survey Proto-
col (Jan. 2000), at http://www.fws.gov/south-
west/es/Arizona/Documents/PublicReview/
CFPO/FINAL REV_PROTOCOL.pdf............... 27
Arizona Ecological Servs. Field Office, FWS,
- Pima Pineapple Cactus (June 2000), at http://
' www.fws.gov/southwest/es/arizona/Documents
/Redbook/Pima%20Pineapple%20cactus%20

Arizona Ecological Servs. Field Office, FWS, ,
Pima Pineapple Cactus, at http://www.fws.gov/
southwest/es/arizona/pima.htm (last visited
EK Sans a irhteiniestescciiecitnnsiestiaitiietsiinneiibibinlihomeundintie 27

Vill

TABLE OF AUTHORITIES — continued

Page
Felicity Barringer, Endangered Species Act Faces
Broad New Chai enges, N.Y. Times, June 26,
TETE? siceapcnicnstaeensailenvansingeniunianidecintinndiivanienaiinaieniities 6
Gillian Flaccus, City May Shoo Endangered Fly,
ee ene 6

GAO, Pub. No. GAO-04-93, Endangered Spe-
cies: More Federal Management Attention Is

Needed to Improve the Consultation Process
[SAT iccetiniiuiniileptitiadabinnte lebaitadaiinaebeniinnniniiniadiie 4,5, 6

Makes Sense For Environment And Home
Buyers, NAHB Says (Apr. 14, 2006), at http://
www.nahb.org/news_details.aspx?newsI D=

ee crentiintiineninniimmmminseenminenimien 5,6
Mitch Tobin, ‘Endangered’ Cactus May Really
Be Prolific, Ariz. Daily Star (May 9, 2004)......... 6

USEPA, National Pollutant Discharge Flimina-
tion System (NPDES): State Program Status, at
http://cfpub.epa.gov/npdes/statestats.cfm (last
CRIS FAR. OG, CII ceccstntcscnemscavernsencrenteenens

USEPA, State or Tribal Assumption of the Sec-
tion 404 Permit Program, at http://www.epa.
gov/owow/wetlands/facts/fact23.html (last up-
I a ee 2

tN

INTERESTS OF AMICI CURIAE'

Amici Beazer Homes USA, Inc., Centex Corporation,
David Weekley Homes, Hovnanian Enterprises, Inc., KB
Home, Kimball Hill, Inc., Lennar Corp., M.D.C. Holdings,
Inc., Meritage Homes Corporation, M/I Homes, Inc., Pulte
Homes, Shea Homes, Standard Pacific Corp., Toll Brothers,
Inc., and Weyerhaeuser Real Estate Co. (collectively, “High
Production Homebuilders”) are 15 of the largest residential
homebuilders in the Nation. Amici engage in residential con-
struction on all scales, from the design of individual homes to
the development of large residential communities. In 2005
alone, amici sold more than 262,000 homes, generating over
$90.9 billion in revenue and representing over 20% of the
United States new home market. In providing these homes to
the Nation’s population, amici not only satisfy a fundamental
human need, they also promote a critical national priority, as
Congress has reaffirmed over and over again.”

Before they begin homebuilding projects, amici typically
must obtain permits under a variety of federal, state and local
regimes. These include the type of Clean Water Act (CWA)
pérmits at issue in this case, which allow point-source dis-
charges to the waters of the United States. See CWA § 402,
33 U.S.C. § 1342. And they include other federal permits,

' Pursuant to this Court's Rule 37.6, amici state that no counsel for any
party authored this brief in whole or in part, and no person or entity other
than amici made a monetary contribution to the preparation or submission
of the brief. Counsel of record for all parties have consented to the filing
of this brief, and letters of consent have been filed with the Clerk.

* See 42 U.S.C. § 1441 (“The Congress declares that the general wel-
fare and security of the Nation and the health and living standards of its
people require housing production and related community develop-
ment ....”), id. § 12701 (affirming “the national goal that every American
family be able to afford a decent home in a suitable environment”); see
also, e.g., National Housing Act of 1934, ch. 847, 48 Stat. 1246 (codified
as amended at 12 U.S.C. § 1701 ef seqg.); Housing Act of 1961, Pub. L.
No. 87-70, 75 Stat. 149; Department of Housing and Urban Development
Act of 1965, Pub. L. No. 89-174, 79 Stat. 667.

2

such as permits for the discharge of fill material under § 404
of the CWA. Id. § 1344.° Before such federal permits may
be issued, § 7 of the Endangered Species Act (ESA) generally
requires the federal agencies permitting the undertaking -
here, the Environmental Protection Agency (EPA) -— to en-
gage in “consultation” with the Fish and Wildlife Service
(F WS) or the National Marine Fisheries Service (NMFS) and
to ensure that their actions will not cause jeopardy to species.

The nature and scope of these inter-agency consultations
and actions are profoundly important to amici, because they
are immensely burdensome and time-consuming. The permit-
ting process for a residential development can take years and
cost hundreds of thousands of dollars — figures often com-
pounded by interest-group litigation when the permit finally
issues. And agency-ordered “alternative measures” may cost
millions. Accordingly, amici have a substantial-interest in
ensuring that the consultation requirement remains within the
boundaries established by Congress and the agencies’ own
regulations. The decision below fails to follow the proper
scope of these authorities.

Like Petitioners EPA and NAHB, amici urge this Court to
hold that, as a matter of law, the transfer of NPDES permit-
ting authority from EPA to Arizona was nondiscretionary and
therefore did not require ESA consultation at all. The focus
of this Brief, however, is the question that this Court must
address if it concludes that consultation was not categorically
excluded: namely, the requisite causal relationship between
an agency action and claimed jeopardy to species. This cau-

> EPA has delegated the § 402 discharge permitting program to 45 of
the 50 States (including Arizona). See USEPA, National Pollutant Dis-
charge Elimination System (NPDES): State Program Status, at http://
cfpub.epa.gov/npdes/statestats.cfm (last updated Apr. 14, 2003). How-
ever, the §$ 404 dredge and fill permitting program has been delegated to
only two States. New Jersey and Michigan. See USEPA, State or Tribal
Assumption of the Section 404 Permit Program, at bhitp://www.epa.
gov/owow ‘wetlands facts‘fact23.html (last updated Feb. 22. 2006).

3

sation requirement both triggers the consultation requirement
and defines its scope. Under the text of the ESA, its imple-
menting regulations, this Court’s longstanding causation ju-
risprudence — and indeed any common-sense understanding
of causation — the agency action must be a proximate cause of
the claimed “jeopardy.” That is, the agency must evaluate
whether an action will result in harm to species that is direct
and foreseeable, not remote, attenuated, or speculative.

The alternative the Ninth Circuit adopted - bare “but-for”
causation — would force agencies to engage in far-reaching
analyses of hypothetical effects. Moreover, it would fore-
close any agency action that could imaginably result in harm,
no matter how remote that possibility or how attenuated the -
chain of causation. This cannot be what Congress intended,
which is why nothing in the statute, its regulations or its legis-
lative history supports such an extreme result. Yet this is pre-
cisely what the Ninth Circuit held: The court below con-
cluded that the simple act of transferring permitting authority
from EPA to the State of Arizona would cause jeopardy to
species, notwithstanding the substantial causal remoteness
between this “action” and any surmised harm. This decision
would amount to an extraordinary expansion of the ESA,
which this Court should reject. |

STATUTORY AND REGULATORY BACKGROUND

I. The § 7 consultation process arises out of the require-
ment that federal agencies “insure that any action [they] au-
thorize|]. fund||, or carr[y] out” is “not likely” to jeopardize
any endangered or threatened species or to adversely modify
critical habitat. 16 U.S.C. § 1536(a)(2); see generally Bennett
v. Spear, 520 U.S. 154, 157-58 (1997). Consultation is an
interagency dialogue between (1) the “action agency” that
intends to authorize, fund, or carry out an action, and (2) the
agencies with authority related to species (FWS and NMFS:
collectively, the “Services”), and involving interested private
parties, such as an applicant for a federal permit.

4

To determine whether consultation is required, the “action
agency” first identifies whether a protected species or habitat
exists within the proposed action area and whether the pro-
posed action “may affect” the species or habitat. 50 C.F.R.
§ 402.14(a). If so, the “action agency” must engage in formal
consultation with the Service, subject to two important excep-
tions. /d.; see Interagency Cooperation - Endangered Species
Act of 1973, as amended, 51 Fed. Reg. 19,926, 19,941 (June
3, 1986) (“A Federal agency must initiate formal consultation
if it determines that its action ‘may affect’ any listed species
or its critical habitat unless it determines through informal
consultation or biological assessment procedures, with the
written concurrence of the Service, that its action ‘is not
likely to adversely affect’ such species or habitat.”’).

Formal consultation requires the Service to prepare a “bio-
logical opinion” (BiOp) evaluating whether the action is
“likely to jeopardize” a protected species. 50 C.F.R.
§ 402.14(h). During this evaluation which often requires
multiple rounds of discussions between the agencies — the
“action agency” must provide substantial information to the
Service. /d. § 402.14(c)-(g). If the Service ultimately reaches
a “no jeopardy” conclusion, the action can go forward. /d.
§ 402.14(h). If, however, the Service concludes that the ac-
tion is likely to jeopardize a protected species, it will recom-
mend project modifications. /d. If no such alternatives exist,
the agency must cancel the action, seek an exemption, or risk
violating the ESA. A developer that proceeds without the
blessing of the consultation process is in turn potentially sub-
ject to suit under § 9 of the ESA, with the attendant threat of
civil and criminal penalties. See 16 U.S.C. §§ 1538, 1540(a),
(b). (g).

Il. The consultation process is fraught with problems, in-
cluding delay and expense. See GAO, Pub. No. GAO-04-93.,
Endangered Species: More Federal Management Attention Is
Needed to Improve the Consultation Process (2004) (“GAO
Report”). After examining several years’ worth of consulta-

5

tion records, the GAO concluded that 30-40% of the Services’
consultations exceeded the time frames established by statute
or regulation. /d. at 3. Indeed, these statistics understate the
delay, because they exclude the “sometimes significant
amount of preconsultation time spent discussing a project be-
fore the consultation is considered to have officially begun” —
a period during which the action cannot proceed. /d.; see also
id. at 17 (noting that preconsultation time “may account for
the majority of the time spent on the entire consultation proc-
ess” (emphasis added)).

For a private party, the costs and delays of becoming en-
tangled in consultation can be significant. For example, the
listing of the bull trout caused the average processing time for
permits to build private docks or structures on Lake Washing-
ton (near Seattle) to increase from 2-3 months to two years.
Id. at 55-56. The pygmy owl listing caused delays of 5-18
months. See http://www.nahb.org/news details.aspx?newsID
=2379&section|D=194 (“NAHB Release”).

These burdens are compounded because the Services often
push the bounds of their statutory and regulatory authority to
and beyond their limits. According to the GAO, “action
agency” officials reported “that the process had gotten out of
control, that they were consulting on many more activities
than was necessary, and that consultations were going beyond
what was called for by the Endangered Species Act.” GAO
Report at 43. For example, “the Services sometimes recom-
mend consultation when it is not really necessary and ... they
request similarly unnecessary amounts of scientific analysis
and documentation on potential effects.” /d. at 39.

Agency delay and overreach beget private costs. These
costs involve the actual expenses incurred during the consul-
tation process; increased costs of unwarranted or unauthor-
ized project modifications and mitigation; and of course op-
portunity costs. Applicants frequently must hire private con-
sultants to assist in the preparation of biological assessments
and mitigation plans and to negotiate with the agencies, often

6

at substantial cost. /d. at 55. In the case of the bull trout, per-
mitting costs — which had been 5% of the total construction
costs for a typical dock — rose to 33% of that total cost. /d. at
54. The consultation and project modifications ensuing from
the pygmy owl listing added $1.7 - $2.7 million to the cost of
a typical Arizona development. See NAHB Release. Similar
stories abound, with compliance, consultation and mitigation
giving rise to massive costs that an overly broad causation
standard will only compound.’

SUMMARY OF THE ARGUMENT

The decision below depended in part on the erroneous con-
clusion that the ESA prohibits any agency action that could,
under a but-for causation standard, result in “jeopardy” to
protected species, no matter how tangential or remote the link
might be. Defenders of Wildlije v. EPA, 420 F.3d 946, 962
(9th Cir. 2005). This interpretation finds no support in law or
logic. Throughout the law, proximate causation is the domi-
nant standard, and absent strong congressional intent to the
contrary. serves as the default rule. Proximate cause is the
core causation standard under the common law, as this Court
has repeatedly recognized. It ts the presumptive standard in
federal statutes — even those with broad language of causa-

* See, e.g., Gillian Flaceus, City May Shoo Endangered Fly, Chi. Trib.,
Feb. 11, 2007 (“[Colton, California officials] say restrictions on building
on the [Dethi Sands flower-loving fly] habitat have limited commercial
growth and cost tens of millions of dollars in economic development.”):
Felicity Barringer, Endangered Species Act Faces Broad New Challenges,
N.Y. Times, June 26, 2005 (citing Agua Caliente Band of Cahuilla Indi-
ans’ claim that more than half the tribe’s 31.000 acres fall into designated
habitat, resulting in “‘an economic impact of hundreds of millions of dol-
lars’”); Mitch Tobin. ‘Endangered’ Cactus May Really Be Prolific, Ariz.
Daily Star, May 9, 2004 (“The [Pima pineapple] cactus may force one
prominent builder to raise the price of 72 homes by $1,181 each. In the
mid-1990s, the cactus threatened to add $10 million to the cost of a pro-
posed 650-acre reservoir on the Southwest Side for the Central Arizona
Project. The proposal was later shelved.”).

7

tion. Environmental statutes such as the ESA are no excep-
tion. In Babbitt v. Sweet Home Chapter of Communities for a
Great Oregon, for instance, all nine Justices treated proximate
cause as the “ordinary requirement|]” and applied it to § 9 of
the ESA. 515 U.S. 687, 696 n.9 (1995).

Nothing in § 7 of the ESA or its implementing regulations
suggests that Congress intended to impose any standard other
than the “ordinary” rule of proximate cause. To the contrary,
the text and implementing regulations affirmatively show that
§ 7 incorporates the usual rule of proximate causation. Over
and again, § 7 and its regulations employ terminology well-
understood as denoting proximate cause. Moreover, the legis-
lative history of the Act reveals a clear desire to avoid the
costs and bureaucratic complications arising out of a regime
predicated on but-for causation.

Here, the transfer of permitting authority from EPA to Ari-
zona is far too remote from the hypothesized harm to satisfy
proximate cause. The transfer itself does not authorize any
harm to species at all — it authorizes no permit to issue and no
development to occur, much less any activity that is intrinsi-
cally harmful. Instead, the transfer simply means that the
Arizona agency may issue permits sometime in the future.
Moreover, those permits do not themselves primarily induce
development; individual development decisions are based on
numerous independent, intervening factors, including the fi-
nancial market, supply, demand, and political choice. And if
development does occur, any harm to species remains specu-
lative, especially because substantial other protections for
species exist. Finally, the causal chain between the water dis-
charge permits and the hypothesized harms to species — which
are entirely “non-water quality related impacts,” NAHB Pet.
App. 562 (Elevation Document) — is far too attenuated to war-
rant application of the ESA. <a

8
ARGUMENT

I. THROUGHOUT THE LAW, PROXIMATE
CAUSE —- NOT MERE BUT-FOR CAUSE - IS THE
DEFAULT RULE OF CAUSATION,

The view of causation adopted by the Ninth Circuit ts with-
out meaningful limit and would have absurd practical effects.
It is, moreover, antithetical to the common-law understanding
of proximate causation, as well as this Court’s clear applica-
tion of that principle to federal statutes in all areas of law.
Particularly in the context at issue here, where the law re-
quires agencies to predict, analyze, and mitigate the future
effects of their proposed actions, it is essential to apply a
proximate-cause standard that imposes sensible limits on
agency inquiry and legal responsibility.

A. To Prevent Limitless Liability, Proximate Cause
is The Rule At Common Law.

It is a fundamental precept of statutory construction that
Congress enacts statutes against the backdrop of the common
law. Congress is presumed to know the standards that exist at
common law and, absent a clear indication to the contrary, to
incorporate them in the statutes it enacts. Sce, e.g., United
States v. Wells, 519 U.S. 482, 491 (1997). Nothing remotely
suggests that Congress abrogated common-law principles
when it enacted the ESA. See Sweet Home, 515 U.S. at 697
n.9, 700 n.13; see also infra Part Il. Accordingly, to under-
stand the causal relationship between an agency “action” and
potential “jeopard[y]” to species that is necessary to trigger
the ESA’s statutory consultation requirement, 16 U.S.C.
§ 1536(a)(2), we begin with the common law.

For more than a century, the common-law rule of causation
has been proximate cause. See, e.g., | Thomas G. Shearman
& Amasa A. Redfield, A Treatise on the Law of Negligence
§ 26, at 27 (Sth ed. 1898) (“The breach of duty, upon which
an action is brought, must be not only the cause, but the
proximate cause, of the damage to the plaintiff.”); Charles

9

Fisk Beach, Jr., A Treatise on the Law of Contributory Negli-
gence or Negligence as a Defense § 305, at 446 (3d ed. 1899)
(proximate cause is “too firmly founded on reason and justice
to be lost sight of in any discussion of liability for negli-
gence”); William B. Hale, Handbook on the Law of Torts
§ 227, at 449 (1896). This Court has long recognized proxi-
mate cause as the common-law rule. See, e.g., Southern Pac.
Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533-34
(1918) (using proximate cause under Federal Employers Li-
ability Act, which incorporates common law standards); see
also Associated Gen. Contractors of Cal., Inc. v. California
State Council of Carpenters, 459 U.S. 519, 531-33 (1983)
(discussing the settled proximate cause standard at the end of
the 19th century}. And proximate cause continues to be the
common-law rule today. See Restatement (Second) of Torts
§§ 281(c), 430-462 (1965): Restatement (Third) of Torts: Ap-
portionment of Liability § 3 (2000).

Proximate cause has been adopted so widely because the al-
ternative — “but-for” causation — is no meaningful alternative
at all. But-for cause merely asks whether the alleged harm
would have occurred in the absence of (i.¢., “but for”) the
complained-of action. This rule leads to “extreme results,”
because “‘the consequences of an act go forward to eternity,
and the causes of an event go back to the dawn of human
events, and beyond.”” Exxon Co., U.S.A. v. Sofec, Inc., 517
U.S. 830, 838 (1996); see also W. Keeton et al.. Prosser and
Keeton on the Law of Torts § 41, at 266 (Sth ed. 1984)
(“Prosser & Keeton”) (“The event without millions of causes
is simply inconceivable ....°); Restatement (Second) of Torts
§ 431 cmt. a. Given this truism, a statute dictating conduct or
resting liability on mere but-for causation would be poten-
tially limitless:

“The chief and sufficient reason for [proximate cause] is
to be found in the impossibility of tracing consequences
through successive steps to the remote cause. and the
necessity of pausing in the investigation of the chain of

10

events at the point beyond which experience and obser-
vation convince us we cannot press our inquiries with
safety.”

Associated Gen. Contractors of Cal., 459 U.S. at 532 n.24
(quoting T. Cooley, A Treatise on the Law of Torts 73 (2d ed.
1888)); accord 1 J.G. Sutherland, A Treatise on the Law of
Damages 57 (1883).

Simply put, proximate cause is necessary “to hold the de-
fendant’s liability within some reasonable” — and objectively
justifiable — “bounds.” Prosser & Keeton § 44, at 302. And
it serves to prevent liability from being imposed for “remote-
consequences.” Sweet Home, 515 U.S. at 713 (O’Connor, J.,
concurring); accord Southern Pac. Co., 245 U.S. at 533-34
(“The general tendency of the law, in regard to damages at
least, is not to go beyond the first step. As it does not attribute
remote consequences to a defendant so it holds him liable if
proximately the plaintiff has suffered a loss.”). Proximate
causation thus acts as a “tool[] to limit a person’s responsibil-
ity for the consequences of that person’s own acts.” Holmes
v. Securities Investor Prot. Corp., 503 U.S. 258, 268 (1992).
This tool reflects both “‘ideas of what justice demands’” and
“of what is administratively possible and convenient,” id.
(quoting Prosser & Keeton § 41, at 264), as well as an effort
to draw a line as to the “appropriate scope of responsibility,”
Dan D. Dobbs, The Law of Torts § 180, at 443 (2001). The
inquiry thus works toward answering a single question:
whether the complained-of action is “so closely connected
with the result and of such significance that the law is justi-
fied in imposing liability.” Prosser & Keeton § 41, at 264.

B. Proximate Cause Is The Default Rule For Fed-
eral Statutes.

1. Given the ubiquity of proximate causation at common
law — and the practical necessity of the rule for preventing
limitless liability — it is unsurprising that proximate cause is
the default rule for federal statutory law. The rule of proxi-

11

mate cause has such force that this Court frequently has inter-
preted statutes that specify no particular causation standard as
incorporating the usual rule of proximate cause. See Anza v.
Ideal Steel Supply Corp., 126 8. Ct. 1991, 1995-98 (2006);
Dura Pharms. v. Broudo, 544 U.S. 336, 342-48 (2005); Sofec,
517 U.S. at 836-39 (1996): /Zolmes, 503 U.S. at 268; Associ-
ated Gen. Contractors of Cal., 459 U.S. at 529-337; Southern
Pac. Co., 245 U.S. at 533-34.

In Associated General Contractors, for instance, this Court
interpreted an exceptionally broad statutory provision as in-
corporating customary principles of proximate causation. The
Clayton Act’s private damages provision authorizes a cause
of action for “{a]ny person who shall be injured in his busi-
ness or property by reason of anything forbidden in the anti-
trust laws.” 15 U.S.C. § 15 (emphasis added). Although the
Court observed that a “literal reading of the statute is broad
enough to encompass every harm that can be attributed di-
rectly or indirectly to the consequences of” a forbidden act, it
declined to impose such but-for liability, because that would
“encompass every conceivable harm that can be traced to al-
leged wrongdoing.” 459 U.S. at 529, 536; see also id. at 534
(“Congress did not intend the antitrust laws to provide a
remedy in damages for all injuries that might conceivably be
‘raced to an antitrust violation.” (emphasis added)). In short,
to ensure that the inquiry of the courts remains squarely
within manageable limits, doctrines such as foreseeability and
proximate causation are applied.

This Court likewise has interpreted broadly worded racket-
eering and securities law provisions as requiring proximate
cause. In Holmes v. SIPC, the Court evaluated the causation
requirement of the Racketeering-Influenced and Corrupt Or-
ganizations Act (RICO), 18 U.S.C. § 1961 ef seg. Like the
Clayton Act, RICO requires only an injury “by reason of” a
statutory violation. Jd. § 1964(c). Noting that “|t|his lan-
guage can, of course, be read to mean” that “the defendant's
violation was a ‘but for’ cause of the plaintiff's injury,” the

12

Court found it implausible that Congress intended to impose
liability on such a thin basis. 503 U.S. at 265-66. The Court
relied on the rationale that has supported the doctrine of
proximate cause for more than a century:

“In a philosophical sense, the consequences of an act go
forward to eternity, and the causes of an event go back
to the dawn of human events, and beyond. But any at-
tempt to impose responsibility upon such a basis would
result in infinite liability for all wrongful acts, and would
‘set society on edge and fill the courts with endless liti-
gation.”

Id. at 266 n.10. Practical considerations, too, militated
against but-for causation: “[T]he less direct an injury is, the
more difficult it becomes” to determine whether the injury is
attributable to the complained-of conduct “as distinct from
other, independent, factors.” /d. at 269; accord Anza, 126 S.
Ct. at 1998 (“The element of proximate causation ... is meant
to prevent these types of intricate, uncertain inquiries from
overrunning RICO litigation.”).

Dura presented a similar issue under the securities laws.
Again, the statute did not specify the necessary causal con-
nection; it simply required proof “that the defendant's misrep-
resentations ‘caused the loss for which the plaintiff seeks to
recover.’” 544 U.S. at 345-46. And again, this Court looked
to “the common-law roots” of the cause of action, and held
that the plaintiff “need[s] to prove proximate causation.” /d
at 344.

2. These longstanding principles — which have applied to
limit liability in retrospective damages inquires are even
more important where (as here) they involve a prospective
inquiry. In the context of backward-looking liability, an in-
jury already has occurred, and the case for relief is manifest.
Yet even there. the law deems many actions to be too remote
and tenuous to be the legal cause of an actual harm. and so
embraces proximate cause.

13

Cases involving prospective inquiries, which involve huge
administrative costs and carry the risk of substantial financial
consequences, create even greater opportunity for endless hy-
pothetical conjecture. As a result, without a meaningful

proximate cause standard, suits for prospective relief would ~

be limited only by the imagination of the plaintiff or, as here,
the agency’s speculation about what future effects might oc-
cur. Thus, there is no reason to treat causation differently in
statutes requiring affirmative conduct — if anything. the justi-
fication for a meaningful proximate cause standard is
stronger.

This Court recognized this concern in defining the effects
that agencies must examine under the National Environmental
Policy Act (NEPA). NEPA requires agencies engaging in
“major Federal actions significantly affecting the quality of
the human environment” to complete “a detailed statement ...
on (i) the environmental. impact of the proposed action, [and]
(ii) any adverse environmental effects which cannot be
avoided should the proposal be implemented.” 42 U.S.C.
§ 4332(C). In Metropolitan Edison Co. v. People Against
Nuclear Energy, 460 U.S. 766, 774 (1983), and again in De-
partment of+Transportation v. Public Citizen, 541 U.S. 752
(2004), the Court held that “a “but for’ causal relationship is
insufficient to make an agency responsible for a particular
effect,” 541 U.S. at 767, and thus is insufficient to require the
agency to analyze that effect under NEPA.

In Metropolitan Edison, the Court reasoned that NEPA re-
quires “a reasonably close causal relationship between a
change in the physical environment and the [prospective] ef-
fect at issue.” which it interpreted as being “like the familiar
doctrine of proximate cause from tort law.” 460 U.S. at 776
(citing W. Prosser, Law of Torts ch. 7 (4th ed. 1971)). This
was necessary to limit the drain on “time and resources” that
would result if an agency were forced to examine hypotheti-
cal, attenuated effects: -

=

14

[A]gencies would, at the very least, be obliged to expend
considerable resources .... The available resources may
be spread so thin that agencies are unable adequately to
pursue protection of the physical environment and natu-
ral resources.... |W Je cannot attribute to Congress the in-
tention to ... open the door to such obvious incongruities
and undesirable possibilities.

/d. (internal citation and quotation marks omitted). In this
context, a rule of but-for causation would require the evalua-
tion of an endless regression of causes and hypothesized,
eventual effects. Proximate cause, accordingly, serves the
necessary goal of conserving scarce agency resources:

Time and resources are simply too limited for us to be-
lieve that Congress intended to extend NEPA as far as
the Court of Appeals has taken it. The scope of the
agency's inquiries must remain manageable if NEPA’s
goal of ‘ensur[ing] a fully informed and well considered
decision’ is to be accomplished.

Id. at 776 (quoting Vermont Yankee Nuclear Power Corp. v.
NRDC, 435 U.S. 519, 551 (1978)). In short, the use of a but-
for standard would sweep in so many possible effects, and the
agencies’ required analysis would as a result be so burden-
some, that the core statutory goal would be undermined.

These considerations apply with even greater force here.
Section 7 of the ESA, like NEPA, entails a prospective analy-
sis of the “effects” that may flow from an agency action. But
whereas NEPA simply requires “a detailed statement” of
those effects, 42 U.S.C. § 4332(C), the ESA requires the
agency to “insure” that such adverse effects do not occur. 16
U.S.C. § 1536(a)(2); see also TVA v. Hill, 437 U.S. 153, 173
(1978). Accordingly, FWS has recognized that “NEPA ...
_ warrant|s| a more expanded review” than does the ESA. In-
teragency Cooperation, 51 Fed. Reg. at 19,933 (emphasis

15

added). The Ninth Circuit’s contrary rule’ would lead to
wide-ranging inquiries into remote ard hypothetical harms.

Il. SECTION 7 OF THE ESA AND ITS IMPLEMENT-
ING REGULATIONS INCORPORATE BASIC
PRINCIPLES OF PROXIMATE CAUSE AND
FORESEEABILITY.

A. This Court Has Interpreted ESA § 9 As Requir-
ing Proximate Cause.

As Metropolitan Edison and Public Citizen demonstrate,
environmental law is no exception to the presumptive rule of
proximate cause. Those cases applied proximate cause to
NEPA, and proximate cause is the rule in other environmental
statutes as well. See, e.g., United States v. West of Eng. Ship
Owner's Mut. Prot. & Indem. Ass'n (Lux.), 872 F.2d 1192,
1198-1200 (Sth Cir. 1989) (Federal Water Pollution Control
Act): Benefield v. Exxon Corp., 959 F.2d 805, 807 (9th Cir.
1992) (Trans-Alaska Pipeline Authorization Act).° Indeed.
this Court already has applied fundamental principles of
proximate causation to the ESA. See Sweet Home, 515 U.S.
687.

Sweet Home involved § 9 of the ESA, 16 U.S.C. § 1538,
which forbids the “knowing” “take” of an endangered or
threatened species. Although this provision does not ex-
pressly use the terms “cause” or “proximate cause,” the Court

* Cf Defenders of Wildlife, 450 F 3d at 404-05 (Berzon, J., concurring
in denial of rehearing en banc) (wrongly concluding that the ESA requires
a broader inquiry than NEPA).

*The presumption that statutes incorporate common-law principles of
proximate cause is especially appropriate in the environmental arena, be-
cause environmental law was born of the common-law tort of nuisance.
See Robert V. Percival et al.. Environmental Regulation: Law, Science,
and Policy 60-61 (4th ed. 2003). Nuisance doctrines long have contained
a proximate cause requirement. See, e.g., Restatement (Second) of Torts
§ 822 (private nuisance); County of Westchester v. Town of Greenwich, 76
F.3d 42, 45 (2d Cir. 1996) (public nuisance).

16

easily found it to incorporate “ordinary requirements of proxi-
mate causation and foreseeability.” 515 U.S. at 697 n.9 (in-
terpreting the phrases “knowingly violates” and “otherwise
violates” to incorporate proximate causation and foreseeabil-
ity); see also id. at 701 n.13 (same).

The concurring and dissenting Justices all agreed that the
ESA incorporates foreseeability and proximate cause. See id
at 712 (O’Connor, J., concurring) (“I see no indication that
Congress ... intended to dispense with ordinary principles of
proximate causation.”); id. (“In the absence of congressional
abrogation of traditional principles of causation, then, private
parties should be held liable ... only if their ... actions proxi-
mately cause [the prohibited results].”); id. at 732 (Scalia, J.,
dissenting) (“I quite agree that the statute contains” a proxi-
mate cause requirement, “because the verbs of purpose in
[§ 9] denote action directed at animals.”). In short, “[i]n the
absence of congressional abrogation of traditional principles
of causation, then, private parties should be held liable [under
§ 9] only if their ... actions proximately cause death or injury
to protected animals.” /d. at 712 (O’Connor, J., concurring).

_As the concurring opinion further explained. proximate
cause serves a critical function in limiting legal responsibility
within sensible and just boundaries. And that fundamental
purpose applies with full force to the ESA. Because “proxi-
mate causation ‘normally eliminates the bizarre,” the appli-
cation of proximate cause prevents the creation of duties and
the imposition of liability for “remote consequences” that this
Court has recognized to be beyond the ESA’s reach. /d. at
713 (O°Connor, J., concurring) (citations omitted).

B. Section 7 Of The ESA Likewise Requires Proxi-
mate Cause.

1. The same bedrock principles of causation that Sweer
Home found in § 9 of the ESA apply to § 7 of that statute as
well. As in Sweet Home, nothing in the statute or regulation
indicates that the “ordinary” rule of proximate causation

17

should not apply to § 7. To the contrary, the text of § 7 dem-
onstrates that Congress affirmatively incorporated proximate
causation into the statute, just as it did in § 9.

There can be little doubt that the language of § 7 contains a
causation requirement. Section 7(a)(2) requires federal agen-
cies to

insure that any action authorized, funded, or carried out
by such agency ... is not likely to jeopardize the contin-
ued existence of any endangered species or threatened
species or result in the destruction or adverse modifica-
tion of habitat of such species.

16 U.S.C. § 1536(a)(2). Just as the term “harm” is defined as
“to cause hurt or damage to,” Sweet Home, 515 U.S. at 697
(emphasis added), the verb “jeopardize” at issue here means
“to cause (something) to be harmed or damaged.” Cambridge
Dictionary of American English 469 (2000) (emphasis
added); see also Sweet Home, 515 U.S. at 732 (Scalia, J., dis-
senting) (recognizing that “the verbs of purpose in [§ 9] de-
note action directed at animals.” and therefore implicate
proximate cause). What is more, the statutory phrase “result
in” is a synonym for “cause.” A “cause” leads to a “result,”
and an action that “results in” an effect is the cause of that
effect. See Roget's 1]; The New Thesaurus 831 (1988) (“re-
sult in” is a synonym for “[t]o be the cause of”); see also Na-
tional Wildlife Fed’n v. Hodel, 839 F.2d 694, 745 (Sth Cir.
1988) (“{t}he phrase ‘resulting from or incident to’ clearly
suggests a causal connection, which ... certainly does require
some type of limiting principle of proximate causation”).

Thus, nothing in the statute indicates that § 7 departs from
the “ordinary” rule of proximate cause — the basic text is to
the contrary. Indeed, additional statutory terms confirm the
existence of such a requirement. Under § 7, the “action
agency” must ensure that its conduct is “not likely to” cause
jeopardy or result in the destruction of habitat. 16 U.S.C.
§ 1536(a\(2). This language of “likelihood” is commonly

18

used to denote proximate cause. See, e.g., Brower v. County
of Inyo, 489 U.S. 593, 599 (1989) (linking proximate causal-
ity to whether a result was “likely”); Waters-Pierce Oil Co. v.
Deselms, 212 U.S. 159, 179 (1909) (tying proximate cause to
the “likely ... result”).

2. The legislative history of § 7 further demonstrates that
Congress drafted the statute to ensure that agencies would not
be forced to evaluate and mitigate remote and speculative
harms. The statute originally commanded agencies to make
certain that their actions “do/] not jeopardize species.’ The
statute was amended in 1979 to reflect the current text, which
requires agencies to “insure” that their actions are “not /ike/y
‘o” jeopardize species. 16 U.S.C. § 1536(a)(2). The Confer-
ence Committee explained that Congress made this change
because

[a]s currently written ... the law could be interpreted to
force the [consulting agency] to issue negative biological
opinions whenever the action agency cannot guarantee
with certainty that the agency action will not jeopardize
the continued existence of the listed species or adversely
modify its critical habitat.

H.R. Conf. Rep. No. 96-697, at 12 (1979), reprinted in 1979
U.S.C.C.A.N. 2572, 2576. This statement plainly reveals
Congress’s intent that agencies review only the direct and
foreseeable impacts of their actions on species, and not en-
gage in purely hypothetical analyses of remote and specula-
tive chains of causation.

’ The pre-1979 version of statute read:
All other Federal departments and agencies shall, in consultation with
and with the assistance of the Secretary, utilize their authorities in fur-
therance of the purposes of [this Act] by taking such actions neces-
sary to insure that actions authorized, funded, or carried out by them
do not jeopardize the continued existence of such endangered species
and threatened species or result in the destruction or modification of
[critical] habitat of such species ....
16 U.S.C. § 1536 (1976) (emphasis added).

19

3. The implementing regulations are consistent with the
Statute — as they must be — and incorporate the same custom-
ary standards of proximate causation and foreseeability. At
the threshold, they require each “action agency” to “review its
actions ... to determine whether any action may affect” listed
species or critical habitat. “50 C.F.R. § 402.14(a). If so, some
form of consultation is required. See supra at 3-4 (discussing
the consultation process). And, at each step along the way,
the regulations governing the consultation process sound in
(and perform the function of) proximate cause — viz., “to hold
the [inquiry] within some reasonable bounds.” Prosser &
Keeton § 44, at 302.

Thus, during consultation, the relevant Service must deter-
mine whether the action “is /ikely to jeopardize, 50 C.F.R.
~ § 402.14(2)(4), or “likely to adversely affect,” id. § 402.13(a),
species or habitat (emphases'added). As noted above, the lan-
guage of action and “likelihood” commonly are used to em-
brace proximate cause. In addition, the phrase “jeopardize
the continued existence of” is defined as “engag[ing] in an
action that reasonably would be expected, directly or indi-
rectly, to reduce appreciably the likelihood of both the sur-
vival and recovery of a listed species.” /d § 402.02 (empha-
sis added). Again, this language of reasonable expectation
and reasonable likelihood invokes fundamental precepts of
proximate cause. See, e.g., Metropolitan Edison Co., 460
U.S. at 774 (interpreting the statutory term “reasonably close
causal relationship” as invoking proximate cause”): Prosser
& Keeton § 41, at 263 (proximate cause requires a “reason-
able connection” between the act and the damage); id. § 43, at
300 (invoking a “reasonably close connection”).°

* Similar standards govern the informal consultation process. See 50
C.F.R. § 402.13. Specifically, “the consultation process is terminated” if
“the action is not /ikely to adversely affect listed species or critical habi-
tat.” /d § 402.13{a) (emphasis added).

20

Moreover, in conducting their analyses, the Services are
obliged to examine the “effects of the action” proposed, as
well as “cumulative effects.” 50 C.F.R. §§ 402.12(a),
402.14(2)(3). The “effects of the action” are defined as “di-
rect” effects and “indirect” effects. Jd. § 402.02.” The phrase
“direct effects” obviously denotes proximate cause. See
Prosser & Keeton § 43, at 294 n.13 (“direct” is “a general
synonym for ‘proximate’”); Sweet Home, 515 U.S. at 732
(Scalia, J., dissenting) (“*[P]roximate’ causation simply
means direct causation.”). In addition, the regulations spe-
cifically define the terms “indirect” and “cumulative” effects
to embody notions of proximate causation. See 50 C.F.R.
§ 402.02 (defining “indirect effects” as “those that are caused
by the proposed action and are later in time, Aut still are rea-
sonably certain to occur” (emphasis added)); id. (defining
“cumulative effects” as “those effects of future State or pri-
vate activities ... that are reasonably certain to occur’); Inter-
agency Cooperation, 51 Fed. Reg. at 19,933 (excluding
“speculative actions” from “the ‘cumulative effects’ analy-
sis”). Indeed, this Court held in Sweet Home that “indirect”
effects, 515 U.S. at 697-98, incorporate principles of proxi-
mate cause, id. at 696 n.9, 700 n.13."°

.

” The “effects of the action” also include “effects of other activities that
are interrelated or interdependent with that action.” 50 C.F.R. § 402.02.
Contrary to the court’s sua sponte analysis below, 420 F.3d at 972-73,
“interrelated” and “interdependent” actions are not at issue here, because
any future development is not “part of a larger action” (the transfer of au-
thority to Arizona); does not “depend on the larger action for [its] justifi-
cation”; and does not lack “independent utility apart from the action under
consideration.” 50 C.F.R. § 402.02. Tellingly, in quoting the regulation
the opinion below omitted much of this critical limiting language.

'’ In one sentence. the BiOp states that FWS “uses the ‘but for’ test.”

NAHB Pet. App. 112. But this statement, unsupported by any citation, is
contrary to the statute and regulations. Even if it were not, FWS cannot be
referring to “but for” causation as typically understood, given that the
same paragraph of the BiOp equates but-for causation with the “substan-
tial factor” test — which is an alternative standard altogether. /d; see
Prosser & Keeton § 41, at 265-68.

21

Hil. THE DECISION BELOW IMPROPERLY ABAN-
DONED TRADITIONAL CONCEPTS OF PROXI-
MATE CAUSATION AND EMPLOYED AN EX-
TREME VERSION OF BUT-FOR CAUSATION.

The Ninth Circuit’s decision abandoned the bedrock princi-
ple of proximate cause. Rejecting the argument that “it is pri-
vate development, not the EPA’s transfer decision, that would
cause any impact on listed species,” the panel adopted a “but
for” causation standard, observing that “[e]vents can be
caused by several actions in a ‘but-for’ causal chain.” De-
fenders of Wildlife, 420 F.3d at 962 (emphasis added). The
court offered no real explanation for this departure from basic
causation principles, but instead stated simply that:

Obviously, without private decisions to construct new
developments, there will be no Clean Water Act con-
struction permits and no impact from the issuance of
such permits on listed species or their habitats. Just as
obviously, without_the-transfer of permitting authority
from the federal to the state government, developers
could be required, as they were before the transfer deci-
sion, to mitigate any impact from their development de-
cision.... The Biological Opinion’s determination to the
contrary disregards the obvious cause analysis ....

Id. at 961-62.

The panel below did not purport to hold that the transfer of
permitting authority was a proximate cause of jeopardy to
species — and properly so. The chain of events that purport-
edly links the transfer of permitting authority to the hypothe-
sized jeopardy entails precisely the type of “remote conse-
quences,” Southern Pac. Co., 245 U.S. at 533-34, and “ripples
of harm.” Associated Gen. Contractors of Cal., 459 U.S. at
534, that are the antithesis of proximate cause.

Specifically. before jeopardy to species could occur here,
the following lengthy chain of intervening events would have
to occur:

1)

2)

3)
4)

5)

6)

7)

8)

22

EPA transfers NPDES permitting authority to the
State of Arizona;

Arizona establishes conditions for issuing CWA
permits that provide no meaningful substitute for
federal ESA consultation;

A developer proposes to construct a development;

The developer determines whether the development
requires an NPDES permit and, if so, applies for it;

Arizona determines whether to grant the NPDES
permit to the developer, and grants it:

The developer acquires any federal permits required
to construct the development — for example, a
dredge-and-fill permit under CWA § 404, which is
not delegated to the State and which may itself trig-
ger ESA consultation;

The developer acquires all of the other state, local,
and financial approvals required to construct the de-
velopment;

The developer constructs the development and ~ ig-
noring the ESA § 9 prohibition against taking spe-
cies — harms a species of concern.

This causal chain is far too remote and attenuated to satisfy
any notion of proximate cause. See Metropolitan Edison, 460
U.S. at 774 (“Some effects that are “caused by’ a change in
the physical environment in the sense of ‘but for’ causation,
will nonetheless not fall within [NEPA] § 102 because the
causal chain is too attenuated.”): Restatement (Second) of
Torts § 433(a) (causation is determined, in part, with refer-
ence to “the number of other factors which contribute in pro-
ducing the harm”). Simply put, “Congress did not intend that

23

Federal actions be precluded by such speculative actions.”
Interagency Cooperation, 51 Fed. Reg. at 19,933."

First, the “agency action” itself will not proximately cause
any harm to species. Far from it: All that is at issue here is
“an administrative transfer of authority” that “will not cause
development.” NAHB Pet. App. 113 (BiOp); id. at 114-17
(observing that jeopardy or habitat alteration is not a natural
or inevitable byproduct of the transfer of authority).'? The
transfer does not “authorize” a single development; it does
nothing more than change the conditions under which devel-
opment might occur. /d. at 80.

That is not enough to establish causation. Causation turns
on whether the defendant’s conduct has “created a force or
series of forces which are in continuous and active operation
up to the time of the harm,” and it is not enough simply to
“create|| a situation harmless unless acted upon by other
forces for which the actor is not responsible.” Restatement
(Second) of Torts § 433(b). Here, this basic requirement is
not met. The transfer of permitting authority from EPA to the
State of Arizona does not set in motion “forces [that] are in
continuous and active operation up to the time of” jeopardy to
species. It simply establishes a condition under which, if a

'' Indeed, this causal chain is so attenuated that it raises serious ques-
tions about Respondents’ standing. See Lujan v. Defenders of Wildlife,
504 U.S. 555, 562 (1992) (standing requires a showing of causation). As
the D.C. Circuit recognized in the NEPA context, “[sJuch a protracted
chain of causation fails [to provide standing] both because of the uncer-
tainty of several individual links and because of the number of speculative
links that must hold for the chain to connect the challenged acts to the
asserted particularized injury.” Florida Audubon Soc'y v. Bentsen, 94
F.3d 658, 670 (D.C. Cir. 1996) (en banc).

'? See also Biological Evaluation for Endangered Species Act Consulta-
tion on USEPA’s Proposed Approval of the State of Arizona's NPDES
Program (June 21, 2002) (“Biological Evaluation”) (NAHB Pet. App. 615,
617) (proposed action is “an administrative shift of authority and is not
associated with any physical action that will alter habitat or affect biota”).

24 rs

variety of other circumstances come to pass, effects on spe-
cies someday may result.

Second, a variety of complicating and intervening factors
further attenuate causation. At bottom, the Ninth Circuit's
concern was that a permit issued by Arizona under the trans-
ferred authority might allow private development. However,
“{djevelopments are driven by any number of factors, includ-
ing but not limited to demand, supply, economics, political
decisions, zoning regulations. and financial market stability.”
NAHB Pet App. 113 (BiOp). This Court has rejected causal
chains far less tenuous than this one. In Holmes, for instance,
the Court rejected a RICO claim as too “remote.” reasoning
that “the less direct an injury is, the more difficult it becomes
to ascertain the [injury] attributable to the violation, as dis-
tinct from other, independent, factors.” 503 U.S. at 269.
Here, the presence of such independent causal factors would
require even more speculation than the Court declined to ap-
prove in Holmes: “EPA’s CWA-mandated approval of the
program has only an attenuated causal link to the reduction in
Federal ESA conservation responsibilities.” NAHB Pet. App.
117 (BiOp); accord Anza, 126 S. Ct. at 1998 (no proximate
cause when a court would have to engage in a “speculative”
inquiry); Southern Pac. Co., 245 U.S. at 533 (“The general
tendency of the law. in regard to damages at least. is not to go
beyond the first step.”).

Third, the State of Arizona is an intervening independent
actor, displacing the EPA as the principal “authorizer” of any
development. “|T]he common law is clear that certain inter-
vening events — otherwise called ‘superceding causes’ — are
sufficient to sever the causal nexus and cut off all liability.”
Archer v. Warner, 538 U.S. 314, 326 (2003); Restatement
(Second) of Torts §452(2) (“Where ... the duty to prevent
harm to another ... is found to have shifted from the actor to a
third person, the failure of the third person to prevent such
harm is a superseding cause.”). One such “intervening event”
is independent action by another entity. See. e.g., Siggers v.

25

Barlow, 906 F.2d 241, 243-47 (6th Cir. 1990); cf Bennett v.
Spear, 520 U.S. at 167 (for there to be standing, the alleged
injury “must be fairly traceable to the challenged action of the
defendant, and not the result of some independent action of
some third party not before the court”). Here, Arizona makes
the ultimate decision whether to issue a particular permit, and
thus is a superceding cause.

Fourth, if development is authorized by an Arizona water
discharge permit, and if it does occur, the Ninth Circuit's hy-
pothesized chain of causation further assumes that no other
protections for species exist. This is simply wrong. Ari-
zona’s individual permitting decisions will be made in light of
the numerous state and local laws that protect endangered and
threatened species.'’ Indeed, it was due in part to the exis-
tence of such laws that the Biological Evaluation concluded
“that any potential adverse effects to Federally-listed species
or critical habitat would be insignificant and/or discountable.”
NAHB Pet. App. 615-16.

Moreover, numerous federal species-protective mecha-
nisms make it speculative whether jeopardy to species will
ultimately result. FWS took these protections into account.
See NAHB Pet. App. 101-11 (BiOp). For instance, if the de-
velopment requires a permit from some other federal
agency — for example. a dredge-and-fill permit — ESA consul-
tation still may be required. In addition, ESA § 9 imposes
civil and criminal penalties for “tak|ing]” any listed species or
destroying critical habitat.” 16 U.S.C. § 1538; see NAHB

‘In Arizona, “a Sonoran Desert Multi-Species Conservation Plan is
currently being drafted to protect the species of greatest concern including
a cactus ferruginous pygmy-ow! and Pima pineapple cactus.” NAHB Pet
App. 115 (BiOp). Arizona law prohibits the taking of native plants from
any land within the State without following certain procedures. Ariz. Rev.
Stat. § 3-904. In fact, the BiOp noted that Arizona's administration of the
permitting program “|wjould provide significant environmental benefits”
because Arizona has substantially more staff than EPA in the relevant
offices. NAHB Pet. App. 82-83.

26

Pet. App. 105-06, 112 (BiOp). The prospect that that provi-
sion will be violated is purely speculative, and such a viola-
tion would in any event break the chain of causation. See
Glass Packaging Inst. v. Regan, 737 F.2d 1083, 1091 (D.C.
Cir. 1984) (rejecting the argument that “consideration of envi-
ronmental effects caused by reasonably foreseeable criminal
acts of third parties” must be considered), overruled in part
on other grounds as explained in Hazardous Waste Treatment
Council v. EPA, 861 F.2d 277, 283 n.2 (D.C. Cir. 1988);
Loggerhead Turtle v. County Council, 92 F. Supp. 2d 1296,
1307, 1308 (M.D. Fla. 2000); see also Strahan v. Coxe, 127
F.3d 155, 164 (ist Cir. 1997) (issuance of a license that can
be used “in a manner consistent with both state and federal
law” is not a “cause” of illegal conduct resulting from misuse
of that license). ESA § 10 provides an additional mechanism
to minimize jeopardy to protected species, in the form of “in-
cidental take” permits — and as the BiOp recognized, the pos-
sibility that such permits would not be obtained is “specula-
tive.” NAHB Pet. App. 114-15."

Furthermore, the ESA holds no monopoly over species pro-
tection. The CWA affords “Substantive ... protections ... to
Federally-listed species and critical habitat under the [EPA]
permit program,” and those protections “will continue under
the [Arizona] permit program.” /d at 616 (Biological
Evaluation). And the Biological Opinion enumerated a vari-
ety of ways in which EPA and FWS would superintend Ari-
zona permitting decisions in order to protect species. /d. at
101-05.

~

' The court below discounted §§ 9 and 10 on the theory that they are
not perfect “substitutes for section 7 coverage.” 420 F.2d at 975. Even if
true, these provisions’ protective effect attenuates the causation between a
transfer of permitting authority and the possibility of jeopardy to species.
indeed, the court properly conceded that §§ 9 and 10 are “important provi-
sions,” and discounted them only by asserting that “there is no indication
[in the record] that section 9 is or will be enforced meaningfully.” Ad. at
975. This is a federal statute backed by civil and criminal penalties, and
so its deterrent effect should be plain.

27

Fifth, this remote and hypothetical causal chain is broken
because the purview of the permitting program at issue here is
water quality, and the species of concern in this case — the
Pima pineapple cactus, as well as the now-delisted pygmy
owl'® — are not asserted to be affected by water quality.
Rather, the species were thought to be potentially subject to
“non-water quality related impacts.” NAHB Pet. App. 562
(Elevation Document) (emphasis added).'° This is not
enough. See Natural Res. Def Council, Inc. v. EPA, 822
F.2d 104, 128-31 (D.C. Cir. 1987) (EPA’s CWA authority
over discharge permits does not create jurisdiction over land-
based construction). Put another way, even assuming that a
transfer of permitting authority could be a cause of jeopardy
to species, it would only be through water-quality-related im-
pacts — and here, there would be no such impacts. Accord-
ingly, transferring the wastewater discharge permitting proc-

'* Although the Arizona branch of the FWS initially identified two spe-
cies as being affected by the permitting transfer program, NAHB Pet.
App. 562, 563, one of those species — the pygmy owl ~ is no longer on the
endangered or threatened species list. Final Rule to Remove the Arizona
Distinct Population Segment of the Cactus Ferruginous Pygmy-ow| From
the Federal List of Endangered and Threatened Wildlife, 71 Fed. Reg.
19,452 (Apr. 14, 2006).

‘© The Pima pineapple cactus “grows in alluvial basins or on hillsides in
semi-desert grassland and Sonoran desertscrub in southern Arizona and
northern Mexico.” See Arizona Ecological Servs. Field Office, FWS,
Pima Pineapple Cactus, at hitp://www.fws.gov/southwestes/arizona/
Documents/Redbook/Pima%e20Pineapple%e20cactus%20RB.pdf (June
2000); see also generally htp://www.fws.gov/southwest es/arizona/pima.
htm (last visited Feb. 19, 2007). The pygmy owl is also a desert upland
species, “found primarily in Sonoran desert scrub vegetation with some
locations in riparian drainages and semi-desert grassland vegetation com-
munities.” See Arizona Ecological Servs. Field Office, FWS, Cactus Fer-
ruginous Pygmy-Owl, at http://www .fws.gov/southwest/es/arizona/
Documents/Redbook/Cactus®%o20F erruginous%e20Pygmy%20owl.
pdf (Jan. 2003); see also generally http://www.fws.gov/southwest/es/
Arizona/Documents/PublicReview/CFPO/FINAL REV PROTOCOL.pdf
(Jan. 2000).

28

ess from EPA to Arizona cannot be considered a “cause” of
the harm contemplated by Respondents.

* * * &

as

Proximate causation is a fundamental principle throughout
the law. This Court has recognized its role in § 9 of the ESA,
and it likewise is the rule in § 7 of the statute. The Ninth Cir-
cuit’s contrary conclusion was mistaken. And its finding of a
causal relationship on a highly attenuated theory of but-for
causation does not satisfy proximate cause, because the per-
“mitting decision is remote from any theoretical jeopardy to
species, and because of the numerous intervening and super-
ceding causes.

CONCLUSION
The decision of the Ninth Circuit should be reversed.
Respectfully submitted, ~

CARTER G. PHILLIPS
STEPHEN M. NICKELSBURG*
Eric A. SHUMSKY

R. JUGE GREGG

BRIAN E. NELSON

SIDLEY AUSTIN LLP

150i K Street, N.W.
Washington, D.C. 20005
(202) 736-8000

Counsel for Amici Curiae
February 20, 2007 *Counselof Record ~

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385016_0293%3A32. Public record. Not legal advice.
