Petition for Writ of Certiorari — Environmental Protection Agency v. Defenders of Wildlife

oupreme Coy

FILE H! U.S.

CY 06-549 0cT 23 2006

Ne. OFFICE OF THE CLERK

In the Supreme Court of the Anited States

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY, PETITIONER

v.

DEFENDERS OF WILDLIFE, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

PAUL D. CLEMENT

Solicitor General

Counsel of Record

SUE ELLEN WOOLDRIDGE

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

MALCOLM L. STEWART

ROGER R. MARTELLA, JR. Assistant to the Solicitor

Acting General Counsel General

MICHAEL G. LEE ANDREW C, MERGEN

Attorney DAVID C. SHILTON

Environmental Protection Attorneys

Agency

Washington, D.C. 20460 Department of Justice

Washington, D.C. 20530-0001

(202) 514-221 ;

QUESTION PRESENTED

Whether Section 7(a)(2) of the Endangered Species Act of

1973, 16 U.S.C. 1536(a)(2), which requires each federal agency

to insure that its actions do not jeopardize the continued

existence of a listed species or modify its critical habitat,

overrides statutory mandates or constraints placed on an

agency’s discretion by other Acts of Congress.

(1)

PARTIES TO THE PROCEEDINGS

The United States Environmental Protection Agency is

the petitioner in this Court and was a respondent in the court

of appeals. '

The following parties are respondents in this Court and

were petitioners in the court of appeals: Defenders of

Wildlife, Center for Biological Diversity, and Craig Miller.

The following parties are respondents in this Court and

were intervenors in the court of appeals: National Associa-

tion of Home Builders, State of Arizona, and Arizona

Chamber of Commerce.

(II)

TABLE OF CONTENTS

Page

I ee re ne Era 1

ES ox cnceeakeeennhet b4ubbnddkeeinseksvensnbes 1

Statutory provisions involved ..............eeceeeeeeeees 2

fs ict ceded ia hee eiauads deeenuee sb euneneste 2

Reasons for granting the petition ....................005- 9

DE ccuscuvdenndcaVecbunaeeenassesiis “ouneeend 27

TABLE OF AUTHORITIES -

Cases:

American Forest & Paper Ass’n v. EPA, 137 F.3d 291

PEE cists dedtsnedbavednnsedieenes passim

Arkansas v. Oklahoma, 503 U.S. 91 (1992) .....2....... 2

Babbitt v. Sweet Home Chapter of Communities, 515

DE tsctudecdauh Weadbaes thu eanvnes 18, 26

Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837 (1984) ..... 18

Conservation Law Found. of New England, Inc. v.

Andrus, 623 F.2d 712 (1st Cir. 1979) ............... 20

Cook County v. United States ex rel. Chandler, 538

PE ices acurreedeLeresenebbadensebens 17

Defenders of Wildlife v. Administrator, EPA, 882

£ 4 ik SB PPPTTTTT TTT Terr TTT eee 20, 21

Department of Transp. v. Public Citizen, 541 U.S. 752

PE” hi etpe wees dee biiee ease ae eee 12, 13, 18, 23

Morton v. Mancari, 417 U.S. 535 (1974) 2... eee. 10

Operation of Mo. River Sys. Litig., In re, 421 F.3d

I id Guu cedsveenkedebissen wes 21

Platte River Whopping Crane Habitat Maintenance

Trust v. FERC, 962 F.2d 27 (D.C. Cir. 1992) . 8, 9, 19, 21

Shell Oil Co. v. Train, 585 F.2d 408 (9th Cir. 1978) 2... 2

TVA v. Hill, 487 U.S. 153 (1978) ............... 15, 16, 19

(IIT)

IV

Case—Continued: : Page

Watt v. Alaska, 451 U.S. 259 (1981) .............0008- 10

Statutes and regulations:

Act of Dec. 28, 1979, Pub. L. No. 96-159, § 4, 93 Stat.

BD cecveccesccnsenchevesudeabscsseueeeieeene 17

Federal Water Pollution Control Act, 33 U.S.C. 1251

et seq.:

SUG. TO oo :kcncisssssecdecseeee 2

33 U.S.C. 1342(b) (§ 402(b)) .......... ee eee passim

SE DL.. GI od cc ciciecddcvcensnanecs 2,6

SE UBL: SRD oc ckiscatdiddviansieeee 2

Endangered Species Act of 1973, 16 U.S.C. 1531

et seq.:

SEU BE.. CRD sc iidccescssssdinueeeeeeeee 2

OR TFARAS. TERMS) os ccekcvevuderccaunacunceen 13

DE UA SHEED 000 00.0000000eceeenseneaeeeene 21

16 U.S.C. 1533 (2000 & Supp. IV 2004) ............ 3

16 U.S.C. 1536 (1976) (Pub. L. No. 93-205, § 7, 87

— RTT Te ee 14

16 U.S.C. 1536(a)(1) ($ T(a)(1)) «0.2... eee ee eee 13, 15

16 U.S.C. 1536(a)(2) (§ 7(a)(2)) 2... ee ee eee passim

OD Sa: SD 0 000054400kedeen Oiecceonvceane 3

16 U.S.C. 1536(b)(3)(A) (8 T(b\B)(A)) .. 6... 3, 13,14

BO UES. TED so cc nccvesscuneesseensoaeeeee 3

SUBS. SBS GS... on. ccvcvisdsvecseasesseee 20

Endangered Species Act Amendments of 1978, Pub.

L. No. 95-632, 92 Stat. 3751:

Ph f. See 15, 16

© S, OB Beat. SIT GIGD oo cccvcsccsvcvcesesecuees 16

V

Statute and regulations—Continued: Page

EE ses es ead cceedeeenoneeneseess 17

50 C.F .R.:

Pt. 17:

i een odie eeeeneeesese ees one

Pt. 222:

EE ee 3

TEC ak dnd Cee b ei denenenesecetecesess 3

eGR EE he Rint ekouse6bb6bES 06540 00s00000800 3

i dete eeu see dkenseceecencoecnes 3

ES She peeedeeniesseus 4, 14, 17, 26

Chine cesenesbetesadseceers passim

eet eldgecgenuensssssese 3

EE cite e edb tdenéegt-eesseces sees. 3

Do. eb ied ceeeeuneesaceseseses 3

Miscellaneous:

IGEEIED co ccccccsecccccccesceces 15

61 Fed. Reg. (1996):

ARGU eRGsddbhaveseande@ereeescecesces: 24

re 24

DT Seer tiue seh ekeaneenss¥ees sencececcceede 24

EE EE OS ne 24

63 Fed. Reg. 33,657-33,658 (1998) ................0065 24

Hi4 Fed. Reg. (1999): «

EEE ee 24

i ere Ue ee Seca ccegeeneetacsesees 24

66 Fed. Reg. (2001):

a. eiencvacccesees 24

ce ined see e cei eadecesceessseeee 24

VI

Miscellaneous—C ontinued: Page

67 Fed. Reg. (2002):

NI ieee ee cc ele eee ieee aaa 4, 23

TEED ccccccceseccccccccesecsccscoccocecsusens 5

FED ccvcccansesctncccvccsccceecsdceesseeeni 24

H.R. Conf. Rep. No. 1804, 95th Cong., 2d Sess. (1978) .. 16

In the Supreme Court of the Gnited States

No.

UNITED STATES ENVIRONMENTAL PROTECTION

AGENCY, PETITIONER

v.

DEFENDERS OF WILDLIFE, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

The Solicitor General, on behalf of the United States En-

vironmental Protection Agency (EPA), respectfully petitions for

a writ of certiorari to review the judgment of the United States

Court of Appeals for the Ninth Circuit in this case.

OPINION BELOW

The opinion of the court of appeals (App. 1a-67a) is reported

at 420 F.3d 946.

JURISDICTION

The judgment of the court of appeals was entered on August

22, 2005. Petitions for rehearing were denied on June 8, 2006

(App. 68a-69a). On August 30, 2006, Justice Kennedy extended

the time within which to file a petition for a writ of certiorari to

and including October 6, 2006. On September 27, 2006, Justice

Kennedy further extended the time to and including October 23,

2006. The jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

(1) -

STATUTORY PROVISIONS INVOLVED

Section 7ta)-(b) of the Endangered Species Act of 1973, 16

U.S.C. 1536(a)-(b), and Section 402(b) of the Federal Water

Pollution Control Act (Clean Water Act or CWA), 33 U.S.C.

1342(b), are reproduced in the appendix to this petition (App.

117a-124a).

STATEMENT

1. The Clean Water Act “anticipates a partnership between

the States and the Federal Government, animated by a shared

objective: ‘to restore and maintain the chemical, physical, and

biological integrity of the Nation’s waters.” Arkansas v.

Oklahoma, 503 U.S. 91, 101 (1992) (quoting 33 U.S.C. 1251(a)).

Under the CWA, the National Pollutant Discharge Elimination

System (NPDES) is administered by EPA unless and until

authority to administer the program within a particular State is

transferred to state officials. The Act provides that “the

Governor of each State desiring to administer its own permit

program for discharges into navigable waters within its juri-

sdiction may submit to [EPA] a full and complete description of

the program it proposes to establish and administer under State

law or under an interstate compact.” 33 U.S.C. 1342(b). The

CWA further states that EPA “shall approve each submitted

program unless [it] determines that adequate authority does not

exist” to ensure that nine specified criteria are satisfied. /bid.;

see 33 U.S.C. 1342(b)(1)-(9). Section 402(b) thus prescribes “a

system for the mandatory approval of a conforming State

program.” Shell Oil Co. v. Train, 585 F.2d 408, 410 (9th Cir.

1978). After NPDES permitting authority has been transferred

to state officials, EPA can object to a state-issued permit only if

it is “outside the guidelines and requirements” of the CWA. 33

U.S.C. 1342(d)(2).

2. Congress enacted the Endangered Species Act of 1973

(ESA) to protect and conserve endangered and threatened

species. 16 U.S.C. 1531(b). To accomplish that goal, Congress

3

directed the Secretaries of Commerce and the Interior to list

threatened and endangered species and designate their critical

habitats. See 16 U.S.C. 1533 (2000 & Supp. IV 2004). The Fish

and Wildlife Service (FWS) implements the ESA with respect to

species under the jurisdiction of the Secretary of the Interior.

See 50 C.F.R. 17.11, 402.01(b). The National Marine Fisheries

Service (NMFS) administers the Act with respect to species

under the jurisdiction of the Secretary of Commerce. See 50

C.F.R. 222.101(a), 223.102.

Section 7(a)(2) of the ESA requires that “|ejach 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.” 16 U.S.C.

1536(a)(2). Section 7(b)(3)(A) states that, once the consultation

process has been completed, “the Secretary shall provide to the

Federal agency and the applicant, if any, a written statement

setting forth the Secretary’s opinion, and a summary of the

information on which the opinion is based, detailing how the

agency action affects the species or its critical habitat.” 16

U.S.C. 1536(b)(3)(A). Section 7(b)(3)(A) further provides that,

“{ilf jeopardy or adverse modification is found, the Secretary

shall suggest those reasonable and prudent alternatives which he

believes would not violate subsection (a)(2) of [Section 7] and can

be taken by the Federal agency * * * in implementing the

agency action.” 16 U.S.C. 1536(b)(3)(A).

Regulations promulgated jointly by the Secretaries of

Commerce and the Interior furnish a structure for consultation

concerning the likely effects on listed species of proposed federal

actions. See 50 C.F.R. Pt. 402; see also 16 U.S.C. 1536(b) and (c).

Inter alia, the regulations establish a process of “formal

consultation,” see 50 C..R. 402.14, which culminates in the

issuance of a biological opinion (BiOp), see 50 C.F.R. 402.14(h),

that includes a “detailed discussion of the effects of the action on

listed species or critical habitat,” 50 C.F.R. 402.14(h\(2). The

4

term “effects of the action” is defined to include “indirect

effects,” ie., “those that are caused by the proposed action and

are later in time, but still are reasonably certain to occur.” 50

C.F.R. 402.02. The regulations further provide that “Section 7

and the requirements of this. part apply to all actions in which

there is discretionary Federal involvement or control.” 50 C.F.R.

402.03.

3. In January 2002, Arizona officials requested EPA’s

authorization to administer the NPDES program in that State.

App. 7a. In June 2002, EPA announced that it had initiated

consultation with FWS pursuant to Section 7(a)(2) of the ESA.

See 67 Fed. Reg. 49,919 (2002). During the consultation process,

FWS staff expressed concern that the transfer of NPDES

authority might have indirect effects on species listed under the

~ ESA. That concern was grounded in the fact that, whereas EPA

itself. would be required by Section 7(a)(2) to consult with FWS

in order to assess the likely effects on listed species of individual

permitting decisions under the CWA, Arizona officials would be

under no similar obligation, since Section 7(a)(2) of the ESA

applies only to federal agency action. See C.A. App. 116-117."

’ The focus of FWS field staff's concern was not that discharges permitted

by the State after a transfer of authority would cause adverse impacts on water

quality that in turn would jeopardize listed species. FWS agreed with EPA

that the proposed transfer of authority was unlikely to have that effect.

Rather, FWS field staff's concern was that the development associated with

such discharges might harm certain terrestrial species. Because large-scale

development could not as a practical matter go forward without CWA discharge

permits, EPA in its own administration of the CWA would treat the impacts of

associated development as impacts of the relevant CWA permits. EPA staff

pointed out, however, that if authority over the NPDES program in Arizona

was transferred to state officials, EPA would lack the power to object to state

permits based on such /on-water-quality-related impacts on listed species.

EPA turther stated that the transter of authority could not properly be

regarded as the cause of adverse impacts to terrestrial species, both because

the link between the two is speculative and attenuated as a factual matter, and

because the CWA directs EPA to approve a State’s application to assume

administration of the NPDES program if the criteria in Seetion 402(b) of the

CWA are met. FWS staff, by contrast, took the position that the consultation

5

On December 3, 2002, FWS issued its BiOp, which concluded

that the requested transfer of NPDES permitting authority

would not cause jeopardy to listed species. C.A. App. 204-231.

FWS stated that, “{alfter further reflection and analysis of

causation and the definition of indirect effects found in our

Consultation Handbook, our final opinion is that the loss of

section 7-related conservation benefits is not an indirect effect of

the approval action.” /d. at 223. FWS explained, inter alia, that

the

loss of any conservation benefit is not caused by EPA's

decision to approve the State of Arizona's program. Rather,

the absence of the section 7 process that exists with respect

to Federal NPDES permits reflects Congress’ decision to

grant States the right to administer these programs under

state law provided the State’s program meets the

requirements of 402(b) of the Clean Water Act.

Id. at 224. FWS also concluded that, even if the effects of the

transfer on listed species could properly be attributed to EPA,

other mechanisms were sufficient to support the conclusion that

the transfer of NPDES permitting authority was not likely to

jeopardize a listed species or adversely modify critical habitat.

See id. at 217-221.

After FWS issued the BiOp, EPA approved the transfer of

permitting authority to Arizona. C.A. App. 232; see 67 Fed. Reg.

at 79,629. EPA found that Arizona’s application met each of the

criteria for program approval specified in Section 402(b) of the

CWA. C.A. App. 258.

4. Defenders of Wildlife and other organizations filed a

petition for review in the court of appeals, contending that EPA

had acted arbitrarily and capriciously by approving Arizona’s

process must include an assessment of indirect effects that FWS believed the

transfer would have on terrestrial species. C.A. App. 117. Pursuant to pro-

cedures set forth in a pre-existing Memorandum of Agreement, tha’ inter-

agency dispute was elevated for resolution at higher levels within the agencies.

See id. at 116.

6

request for authority to administer the NPDES program. The

court of appeals granted the petition for review. App. la-67a.

a. The court of appeals first held that EPA’s approval of

Arizona’s transfer application was arbitrary and capricious

because EPA had “relied during the administrative proceedings

on legally contradictory positions regarding its section 7

obligations.” App. 23a; see App. 23a-28a. The court explained

that, although EPA had construed Section 7 of the ESA as

requiring it to consult with FWS concerning the effect on listed

species of the proposed transfer of permitting authority, FWS’s

no-jeopardy opinion was based in part on the premise that EPA

cannot deny a transfer application under Section 402(b) of the

CWA based on ESA concerns if the CWA criteria are satisfied.

See App. 23a-26a. The court concluded that EPA’s approval of

the transfer application “was not the result of reasoned decision-

making” because “the two propositions that underlie the EPA’s

action—that (1) it must, under the [ESA], consult concerning

transfers of CWA permitting authority, but (2) it is not

permitted, as a matter of law, to take into account the impact on

listed species in making the transfer decision—cannot both be

true.” App. 26a-26a. The court stated that it was therefore

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

its decision, based on a single, coherent interpretation of the

statute.” App. 28a.

b. Rather than, in fact, remanding the case on that ground,

however, the court of appeals went on to hold that EPA had both

the power and the duty under the ESA to determine whether

transfer of NPDES permitting authority to state officials would

jeopardize listed species, and to deny a transfer application if it

found jeopardy to be likely, even though it is undisputed in this

case that the State of Arizona had satisfied the criteria (see 33

U.S.C. 1342(b)(1)-(9)) that trigger the requirement in 33 U.S.C.

1342(b) that EPA “shall” approve a State’s transfer application.

App. 28a-4sa; see App. 3la nll. That holding was grounded in

the court's view that Section 7 of the ESA provides aii

7

“affirmative grant of authority to attend to protection of listed

species,” over and above whatever obligations federal agencies

may have under their own governing statutes. App. 34a; see

App. 38a-39a. The court found that authority to be unaffected by

the CWA’s directive that EPA “shall approve” state applications

that satisfy the criteria set forth in 33 U.S.C. 1342(b). See App.

40a. The court of appeals also rejected the contention, advanced

by non-federal parties who had intervened in support of EPA,

that EPA’s approval of the State’s transfer application was not

subject to Section 7 of the ESA because it was not a “dis-

cretionary” action within the meaning of 50 C.F.R. 402.03. See

App. 40a-44a. The court construed that regulation’s reference to

- “discretionary” action to encompass all agency actions that are

“authorized, funded, or carried out” by the agency. App. 43a

(quoting 16 U.S.C. 1586(a)(2)).?

The court of appeals acknowledged that its conclusion that

Section 7(a)(2)’s obligations are triggered in this case even

though Section 402(b) of the CWA mandates approval of a

transfer application conflicts with decisions of two other courts

of appeals. See App. 44a-47a (citing American Forest & Paper

Assn v. EPA, 137 F.3d 291 (5th Cir. 1998), and Platte River

Whooping Crane Habitat Maint. Trust v. FERC, 962 F.2d 27

(D.C. Cir. 1992)). The court believed, however, that its holding

was supported by Ninth Circuit precedent and decisions of two

other courts of appeals. App. 42a-43a, 44a-46a, 47a-48a."

ce. Judge Thompson dissented, relying on 50 C.F.R. 402.03

and on an array of Ninth Circuit precedents holding that Section

* The court of appeals reached that cenclusion on an important question of

law despite the government's repeated request to have the opportunity for

additional briefing on the question should the court, contrary to the suggestion

of the government, decide to reach the issue. See App. 43a n.19.

’ The court of appeals also held that the other bases for FWS’s no-jeopardy

conelusion did not adequately support EPA's decision to approve the transfer

of permitting authority. App. 4Sa-6 la.

8

7T(a)(2) of the ESA does not encompass agency conduct as to

which the agency lacks discretion. See App. 63a-67a. Judge

Thompson explained:

Here, the EPA did not have discretion to deny transfer of the

pollution permitting program to the State of Arizona;

therefore its decision was not “agency action” within the

meaning of section 7 of the Endangered Species Act. The

Clean Water Act, by its very terms, permits the EPA to

consider only the nine specified factors. If a state’s proposed

permitting program meets the enumerated requirements,

the EPA administrator “shall approve” the program. 33

U.S.C. § 1342(b). This Congressional directive does not

permit the-EPA to impose additional conditions.

App. 65a-66a. Judge Thompson concluded that, because “(t]he

EPA’s authority to grant or to deny the State of Arizona’s

application to administer the pollution permitting program was

nondiscretionary,” the petition for review should be denied. App.

67a.

d. The court of appeals denied rehearing and rehearing en

bane, with six judges dissenting. App. 68a. Judge Kozinski,

writing for the dissenting judges, observed that, “[i]f the ESA

were as powerful as the majority contends, it would modify not

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

mandate applicable to every federal agency.” App. 78a n.4. The

dissenting judges also explained that the Ninth Circuit’s decision

conflicts with rulings of two other courts of appeals, which have

held that the ESA does not expand the powers of federal

agencies or supersede contrary statutory mandates, but simply

directs agencies’ exercise of existing discretionary authority. See

App. 79a-Sla (citing American Forest & Paper Ass‘n v. EPA,

supra, and Platte River Whooping Crane Trust v. FERC, supra).

REASONS FOR GRANTING THE PETITION

This case presents the important question whether the no-

jeopardy and consultation requirements of Section 7(a)(2) of the

ESA can operate to preclude agency conduct that is mandated by

another Act of Congress. The Ninth Circuit answered that

question in the affirmative, holding that EPA’s approval of

Arizona’s application for transfer of NPDES authority violated

Section 7(a)(2), even though the CWA provides that EPA “shall

approve” a transfer application when specified criteria are met,

and it was undisputed that those CWA criteria were satisfied

here. That ruling is erroneous. Moreover, as both the majority

and dissenting judges recognized, the Ninth Circuit’s ruling

conflicts with decisions of two other courts of appeals, which have

properly construed Section 7(a)(2) of the ESA as channeling

federal agencies’ exercise of their existing discretionary

authority, but not as superseding constraints or overriding

mandates imposed by other laws. And because Section 7(a)(2)

applies to all federal agencies, the court of appeals’ decision has

government-wide significance. Review by this Court is war-

ranted in light of the erroneous nature of the court of appeals’

ruling; the square conflict with decisions of other circuits,

including in this specific context; and the practical importance of

the question presented for all manner of government actors.

1. Section 402(b) of the CWA states in unqualified terms that

EPA “shall approve” a State’s application to administer the

NPDES program “unless” the State fails to satisfy one or more

of the nine criteria set forth in the CWA itself. 38 U.S.C. 1342(b);

see App. 82a (Kleinfeld, J., dissenting from denial of rehearing

en bane) (“The ‘shall/unless’ formula makes the nine conditions

exclusive.”). In the instant case, “[njo party questioned the

EPA's determination that Arizona's transfer application met the

Clean Water Act factors.” App. 3lan.11. The court of appeals

nevertheless set aside EPA’s approval of Arizona’s transfer

10

application, holding that “Section 7(a)(2) [of the ESA] imposes a

duty on the EPA to ‘insure’ its transfer decision is not likely to

jeopardize protected species or adversely modify their habitat,”

and that EPA had failed adequately to perform that duty. App.

48a; see App. 6la-63a. In practical effect, the court treated

Section 7(a)(2) of the ESA as impliedly repealing the CWA’s

directive that EPA “shall approve” a state transfer application

that satisfies the CWA criteria and as effectively imposing a

tenth criterion. See App. 78a n.4 (Kozinski, J., dissenting from

denial of rehearing en banc).

That holding is erroneous. As this Court has repeatedly

recognized, “repeals by implication are not favored,” and “(t]he

intention of the legislature to repeal must be clear and manifest.”

Watt v. Alaska, 451 U.S. 259, 267 (1981) (citations and internal

quotation marks omitted). For the reasons that follow, Section

7(a)(2)’s no-jeopardy and consultation requirements are properly

construed to channel the exercise of federal agencies’ existing

discretionary authority, not to override other federal mandates

or to require species-protective measures that are forbidden by

other federal laws. That reading is particularly appropriate

because it avoids unnecessary conflicts between the ESA and

other Acts of Congress. See Morton v. Mancari, 417 U.S. 535,

551 (1974) (“[W]hen two statutes are capable of co-existence, it

is the duty of the courts, absent a clearly expressed

congressional intention to the contrary, to regard each as

effective.”). If Section 7(a)(2) is construed in that manner, its no-

jeopardy and consultation requirements are fully consistent with

the CWA’s directive that EPA “shall approve” any state NPDES

transfer application that satisfies the nine specified CWA

criteria.

a. Section 7(a)(2) of the ESA requires each federal agency to

“insure that any action authorized, funded, or carried out by such

agency * * * is not likely to jeopardize the continued existence

of any endangered specics or threatened species.” 16 U.S.C.

11

1536(a)(2). Section 7(a)(2) thus does not impose upon federal

agencies any affirmative duty to protect listed species from

harms caused by other actors, such as a state permittee. Rather,

a federal agency’s duty under that provision is simply to ensure

that the species is not jeopardized by actions attributable to the

agency itself. Where (as here) the conduct that is alleged to

cause harm to species is mandated by an Act of Congress, the

effect is not properly attributed to the federal agency that simply

carries out the statutory directive.

The gravamen of respondents’ challenge to the transfer of

NPDES authority is that Arizona’s permitting regime may be

less protective of listed species than is the NPDES program as

administered by EPA officials because the State’s individual

permitting decisions will not be federal agency actions and

therefore will not be subject to the no-jeopardy and consultation

requirements of Section 7(a)(2) of the ESA. Acceptance of that

position would frustrate Congress’s federalism-sensitive judg-

ment to transfer authority to States once the nine criteria are

met. And it is clearly that congressional judgment, not any dis-

cretionary agency action, that would be the cause of any adverse

impact that the transfer might entail.

As FWS explained in its BiOp in this case, any harm to listed

species that may result from the challenged transfer is “not

caused by EPA’s decision to approve the State of Arizona's

program. Rather, the absence of the section 7 process that exists

with respect to Federal NPDES permits reflects Congress’

decision to grant States the right to administer these programs

under state law provided the State’s program meets the

requirements of [Section] 402(b) of the Clean Water Act.” C.A.

App. 224. FWS thus correctly recognized that Congress’s

decision to enact the mandatory directive contained in 33 U.S.C.

1342(b), rather than EPA’s compliance with that statutory

command, is the legal cause of any harm to listed species that the

transfer of NPDES permitting authority may entail. FWS

12

regulations implementing the ESA make clear that an agency is

required to take into account only those effects that are “caused”

by its actions. See C.A. App. 222-223 (citing 50 C.F.R. 402.02

(defining “indirect effects” as those that are both “caused” by the

proposed action and “are later in time, but still are reasonably

certain to occur”)).

The causation analysis in the FWS BiOp is strongly

supported by this Court’s subsequent decision in Department of

Transportation v. Public Citizen, 541 U.S. 752 (2004). The Court

in Public Citizen held that the National Environmental Policy

Act (NEPA) did not require the Federal Motor Carrier Safety

Administration (FMCSA) to prepare an Environmental Impact

Statement (EIS) assessing the environmental effects of allowing

Mexican trucks onto United States roads once the President

lifted a prior moratorium on Mexican trucks. The Court

explained that “NEPA requires a reasonably close causal

relationship between the environmental effect” and the pertinent

agency conduct before an EIS must be prepared. /d. at 767

(internal quotation marks omitted). The Court further observed

that

F MCSA has only limited discretion regarding motor vehicle

carrier registration: It must grant registration to all

domestic or foreign motor carriers that are willing and able

to comply with the applicable * * * requirements. FMCSA

has no statutory authority to impose or enforce emissions

controls or to establish environmental requirements

unrelated to motor carrier safety.

7d. at 758-759 (citation and internal quotation marks omitted). In

those circumstances, the Court reasoned, “the legally relevant

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

but instead the actions of the President in lifting the moratorium

and those of Congress in granting the President this authority

while simultaneously limiting FMCSA’s diseretion.” /d. at 769.

13

Thus, the Court in Public Citizen concluded that, “where an

agency has no ability to prevent a certain effect due to its limited

statutory authority over the relevant actions, the agency cannot

be considered a legally relevant ‘cause’ of the effect.” 541 U.S. at

70. The same principle applies here. Because the CWA

forecloses EPA’s ability to deny a State's transfer application

based on projections of injury to listed species, EPA is not the

legal cause of any such harm that may result from activities that

are authorized by NPDES permits issued by the State of Arizona

after the transfer occurs. Instead, the legally relevant cause is

the action of “Congress in * * * limiting |EPA’s] discretion,”

Public Citizen, 541 U.S. at 769, by mandating approval of a

transfer application that satisfies the criteria in Section 402(b) of

the CWA. The agency’s approval of Arizona’s transfer appli-

cation therefore cannot properly be said to “jeopardize”—i.e.,

cause jeopardy to—the continued existence of any listed species."

b. Other provisions of the ESA reinforce the conclusion that

Section 7(a)(2)’s no-jeopardy and ancillary consultation

requirements do not apply to agency conduct that is mandated by

another federal statute. Section 2(¢) of the ESA reflects Con-

gress’s policy judgment that all federal agencies “shall utilize

their authorities in furtherance of” the statute’s purposes. 16

U.S.C. 1531(e)(1) (emphasis added). Section 7(a)(1) similarly

provides that agencies “shall * * * utilize their authorities in

furtherance of the purposes of [the ESA] by carrying out

programs for the conservation of endangered species.” 16 U.S.C.

1536(a)(1) (emphasis added). And Section 7(b)(3)(A), which

governs the inter-agency consultation process, states that, “[ilf

jeopardy or adverse modification is found, the Secretary shall

suggest those reasonable and prudent alternatives which he

‘Alternatively, EPA’s lack of discretion in this area might support a

conclusion that EPA's approval of a State's transfer application in accordance

with the CWA’s command is not an “ageney action” within the meaning of

Section 7(aX2) of the FSA. See App. tija (Thompson, .1., dissenting).

14

believes would not violate [Section 7(a)(2)] and can be taken by

the Federal agency * * * in implementing the agency action.”

16 U.S.C. 1536(b\(3)(A) (emphasis added). The italicized

language in each of those provisions reflects Congress’s intent

that federal agencies’ efforts to prevent harm to listed species

must be undertaken in conformity with any constraints imposed

by other laws.

The court of appeals appeared to recognize that the phrase

“utilize their authorities,” where it appears in the ESA, reflects

Congress’s intent that federal agencies should pursue the ESA’s

objectives only to the extent that they are permitted to do so by

other provisions of law. See App. 34a-35a, 46a. The court

concluded, however, that because Section 7(a)(2) itself does not

contain that phrase or similar limiting language, Section 7(a)(2)’s

no-jeopardy mandate supersedes mandatory directives contained

in other Acts of Congress. See 7bid. That conclusion reflects a

misunderstanding of the ESA’s history.

As originally enacted in 1973, Section 7 of the ESA directed

all federal agencies to

utilize their authorities in furtherance of the purposes of

{the| Act by carrying out programs for the conservation of

endangered species and threatened species * * * and by

taking such action necessary 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 modifi-

cation of |critical] habitat of such species.

ESA, Pub. L. No. 93-205, 87 Stat. 892 16 U.S.C. 1536 (1976)). As

its text just quoted makes clear, in Section 7's original form, the

obligations of federal agencies to carry out conservation

~ Accord 50. CFR. 402.02 (defining reasonable and prudent alternatives as

alternatives that. ivfer alia, “ean be implemented consistent with the scope of

the Federal agency's legal authority and jurisdiction”).

15

programs (now contained in Section 7(a)(1)) and to avoid

jeopardy (now contained in Section 7(a)(2)) were both qualified

by the phrase “utilize their authorities.” Consistent with that

limitation, Representative Dingell, the floor manager of the bill

in the House of Representatives, explained that the ESA as

originally enacted “substantially amplified the obligation of

* * * agencies * * * to take steps within their power to carry

out the purposes of this act.” 119 Cong. Rec. 42,913 (1973)

(emphasis added). This Court quoted that very statement by

Representative Dingell in its seminal ESA decision in TVA v.

Hill, 437 U.S. 153, 183 (1978).

Through amendments eriacted in 1978, Section 7 of the ESA

was divided into subsections. See Endangered Species Act

Amendments of 1978, Pub. L. No. 95-632, § 3, 92 Stat. 3752.

Subsection (a) of Section 7, as enacted in those 1978 amend-~

ments, contained in two separate sentences substantially the

same language as is now set forth in current Subsections 7(a)(1)

and (2). As amended in 1978, Section 7(a) provided as follows:

Consultation.—The Secretary shall review other programs

administered by him and utilize such programs in

furtherance of the purposes of [the ESA]. All other Federal

agencies shall, in consultation with and with the assistance of

the Secretary, utilize their authorities in furtherance of the

purposes of this Act by carrying out programs for the

conservation of endangered species and threatened species

listed pursuant to section 4 of this Act. Each Federal agency

shail, 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) does not 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 the affected States, to

16

be critical, unless such agency has been granted an

exemption for such action by the Committee pursuant to

subsection (h) of this section.

1978 Amendments, § 3, 92 Stat. 3752.

The Conference Report accompanying the 1978 amendments

explained that the new subsection 7(a) “essentially restates

section 7 of existing law.” H.R. Conf. Rep. No. 1804, 95th Cong.,

2d Sess. 18 (1978). Thus, while the no-jeopardy and ancillary

consultation requirements were set forth in a separate sentence

that did not repeat the phrase “utilize their authorities”

contained in the preceding sentence, the 1978 legislative history

indicates that Congress in rewording Section 7 did not seek to

expand the scope of federal agencies’ no-jeopardy and

consultation duties in potentially far-reaching ways, but rather

intended to preserve the substance of the requirements in their

prior form. Indeed, the court of appeals in this case recognized

that “(|t}he 1978 amendment did not change section 7's

substantive provisions,” App. 36a, though the court failed to

appreciate the significance of that fact. The clear import of the

1978 amendments therefore is that the obligation of an agency

not to jeopardize a listed species remained simply a particular

(albeit mandatory) aspect of the more generalized provision in

the preceding sentence for agencies to “utilize their authorities”

in furtherance of the Act’s purposes.

The foregoing history is particularly significant in light of the

events that precipitated passage of the 1978 amendments. Those

amendments were enacted only a few months after this Court's

decision in TVA v. Hill, supra, which construed the ESA to

preclude operation of the Tellico Dam in Tennessee. See 437

U.S. at 156-158, 193-195. Inter alia, the 1978 amendments

softened the practical effect of the decision in H7// by creating

the Endangered Species Committee, which is authorized to grant

exemptions from Section 7(a)(2)'s no-jeopardy mandate, see 1978

Amendments, § 3, 92 Stat. 3753-3760, and by directing the

17

Committee promptly to determine whether the Tellico Dam and

Reservoir Project should be granted an exemption, see id. § 5, 92

Stat. 3761. Given that sequence of events, it is most unlikely that

Congress chose simultaneously to expand the reach of Section 7’s

no-jeopardy requirement to require an agency to ignore a

mandate in another Act of Congress. And it is altogether

implausible to suppose that Congress intended to accomplish

that result obliquely, by putting the phrase “utilize their

authorities” in a separate sentence from Section 7(a)’s no-jeop-

ardy and consultation requirements, without mentioning the

change in the legislative history. Cf. Cook County v. United

States ex rel. Chandler, 538 U.S. 119, 132-134 (2003) (declining to

construe 1986 amendments to the False Claims Act as impliedly

removing municipal corporations from the Act’s coverage when

such a change would have been contrary to the primary thrust of

the 1986 legislation).”

c. The federal agencies charged with primary responsibility

for the administration of the ESA have addressed the application

of Section 7(a)(2)’s no-jeopardy and consultation requirements to

agency conduct, like EPA’s approval of Arizona’s transfer

application in this case, that is affirmatively mandated by some

other provision of law. First, as noted above, a regulatory

provision jointly adopted by FWS and NMFS provides that the

relevant effects on listed species under Section 7(a)(2) are those

“caused” by the agency's own action. 50 C.F.R. 402.02 (defining

“effects of the action”). The effects of a statutory mandate are

caused by Congress, not by the agency.

" In 1979, Section 7(a) was further divided into subsections (1), (2), and (3).

See Act of Dec. 28, 1974, Pub. L. No. 96-159, § 4, 98 Stat. 1226. Once again,

however, that further subdi> sion made no substantive change. Accordingly,

an agency's duty to “insure” that its actions will not jeopardize a listed species

(and to engage in consultation to that end) continues to be limited to measures

the agency might take to “utilize |its] authorities” under existing law. The

1979 amendments also added the final sentence of what is now Section Tiay(2).

See ibid.

18

Second, another regulatory provision adopted jointly by

F'WS and NMFS states that “Section 7 and the requirements of

[50 C.F.R. Pt. 402] apply to all actions in which there is

discretionary Federal involvement or control.” 50 C.F.R. 402.03

(emphasis added). That rule reflects the longstanding view of

FWS and NMFS that Section 7 channels federal agencies’

exercise of existing authority and discretion, but does not

supersede other legal constraints on agency conduct.

The construction of Section 7 of the ESA that is reflected in

50 C.F.R. 402.02 and 402.03 is reasonable and is entitled to

deference under the principles announced in Chevron U.S.A. Ine.

v. NRDC, 467 U.S. 837 (1984). See Babbitt v. Sweet Home

Chapter of Communities, 515 U.S. 687, 703 (1995) (Sweet Home)

(“The latitude the ESA gives the Secretary in enforcing the

statute, together with the degree of regulatory expertise

necessary to its enforcement, establishes that we owe some

degree of deference to the Secretary’s reasonable

interpretation.”). The court of appeals in this case quoted 50

C.F.R. 402.02 and recognized its parallel to the causation

standard under NEPA as explained in Public Citizen, see App.

30a, but then reached a conclusion flatly contrary to this Court’s

analysis in Public Citizen. As for 50 C.F.R. 402.03, the court of

appeals construed its reference to “actions in which there is

discretionary Federal involvement or control” to encompass

EPA’s approval of Arizona’s transfer application, on the ground

that “EPA had exclusive decisionmaking authority over

Arizona’s pollution permitting transfer application,” App. 44a,

even though EPA did not have discretion under the CWA to

deny the transfer but was instead compelled to grant Arizona's

application once the CWA criteria were satisfied. FWS and

NMFS have since confirmed, however, that agency conduct

mandated by another Act of Congress is not subject to

“discretionary Federal involvement or control” within the

meaning of Section 402.08. See pp. 25-26, infra; App. 103a-1 16a.

19

2. As the court of appeals acknowledged (see App. 44a-45a,

46a-47a; see also App. 79a-8la (Kozinski, J., dissenting from

denial of rehearing en banc)), the court’s decision in this case

conflicts with decisions of two other circuits, which have correctly

held that the no-jeopardy requirement of Section 7(a)(2) of the

ESA does not apply to agency conduct that is mandated by

another federal statute.

a. In Platte River Whooping Crane Habitat Maintenance

Trust v. FERC, 962 F.2d 27 (1992) (Platte River), the District of

Columbia Circuit held that Section 7 of the ESA did not

supersede limitations imposed by the Federal Power Act on the

authority of the Federal Energy Regulatory Commission to

amend existing licenses. See id. at 34. The court explained that

the ESA “directs agencies to ‘utilize their authorities’ to carry

out the ESA’s objectives; it does not expand the powers

conferred on an agency by its enabling act.” /bid. The court

specifically rejected the contention that 7VA v. Hill supported

a more expansive construction of Section 7, noting that this

Court’s decision in Hill “did not even consider whether section

7 allows agencies to go beyond their statutory authority to carry

out the purposes of the ESA.” /bid.; compare App. 32a (court of

appeals in this case states that the decision in Hill “confirms (the

court’s| textual interpretation” of Section 7(a)(2)).

b. In American Forest & Paper Ass'n v. EPA, 137 F.3d 291

(1998) (American Forest), the Fifth Cireuit relied in part on

Platte River in rejecting the argument that the ESA trumps the

mandatory character of the CWA state-transfer provisions or

supplants the CWA's criteria ior approving transfers of

authority. The court in American Forest considered the question

whether EPA could condition a transfer of NPDES permitting

authority to Louisiana on that State’s agreement to consult with

FWS and/or NMFS regarding impacts or endangered and —

threatened species before issuing permits under the CWA. See

id. at 293-294, 297, 298-299. In holding that EPA could not

20

impose such a condition, the Fifth Circuit stated that “[t]he

language of {33 U.S.C. 1342(b)] is firm: It provides that EPA

‘shall’ approve submitted programs unless they fail to meet one

of the nine listed requirements.” /d. at 297. With respect to

-Section 7(a)(2) of the ESA, the court stated:

EPA argues that ESA § 7(a)(2) * * * compels EPA to

do everything reasonably within its power to protect

endangered species. The flaw in this argument is that if

EPA lacks the power to add additional criteria to [33 U.S.C.

1342(b)|, nothing in the ESA grants the agency the authority

to do so. Section 7 of the ESA merely requires EPA to

consult with FWS or NMFS before undertaking agency

action; it confers no substantive powers.

Id. at 298. The court concluded that “the ESA serves not as a

font of new authority, but as something far more modest: a

directive to agencies to channel their existing authority in a

particular direction. The upshot is that EPA cannot invoke the

ESA as a means of creating and imposing requirements that are

not authorized by the CWA.” /d. at 299.’

‘ The Ninth Circuit's reliance (App. 45a-46a) on Conservation Law

Foundation of New England, lnc. v. Andrus, 623 F.2d 712 (1st Cir. 1979), and

Defenders of Wildlife v. Administrator, EPA, 882 F.2d 1294 (8th Cir. 1989), is

misplaced. In Conservation Law Foundation, the court upheld the denial of

a preliminary injunction against a lease sale under the Outer Continental Sheif

Lands Act (OCSLA). See 623 F.2d at 714-715, 719-720. The court observed

that the ESA would apply to future exploration and production stages of the

project, see id. at 715, but it did not address the proper resolution of any

hypothetical future dispute in which Section 7(a)(2) of the ESA might be

claimed to prohibit conduct that the OCSLA required. The court in Defenders

of Wildlife held that the Federal Insecticide, Fungicide, and Rodenticide Act

(FIFRA) “does not exempt the EPA from complying with ESA requirements

when the EPA registers pesticides,” 882 F.2d at 1299, and it concluded that

particular EPA registrations of strychnine violated Section 9 of the ESA, see

id. at 1300-1301. The court did not find a violation of Section 7(a)(2), however,

nor did it suggest that the FIFRA required EPA to register the pertinent

strychnine products. The court therefore had no vecasion to address the

21

3. The court of appeals’ decision raises issues of govern-

ment-wide significance. Section 7(a)(2) applies to every “Federal

agency,” 16 U.S.C. 1536(a)(2), and the ESA defines that term to

mean “any department, agency, or instrumentality of the United

States.” 16 U.S.C. 1532(7). As the court of appeals judges who

dissented from denial of rehearing en banc observed, “{ilf the

ESA were as powerful as the majority contends, it would modify

not only EF PA’s obligation under the CWA, but every categorical

mandate applicable to every federal agency.” App. 78a n.4. The

substantial practical implications of the court of appeals’ decision

reinforce the need for review by this Court.

4. The court of appeals also held that “EPA’s approval of

Arizona’s transfer application cannot survive arbitrary and

capricious review because the EPA relied during the

administrative proceedings on legally contradictory positions

regarding its section 7 obligations.” App. 23a. The court stated

that a principal basis for FWS’s finding that the transfer of

permitting authority would not jeopardize listed species—?.e.,

F'WS’s conclusion that the transfer decision was not the legal

cause of any harm to the species because the transfer was

mandated by Section 402(b) of the CWA—was inconsistent with

EPA’s antecedent determination that consultation was required

interpretive issue presented in this case. In asubsequent decision involving the

ESA, moreover, the Eighth Circuit observed that “|cjase law supports the

contention that environmental- and wildlife-protection statutes do not apply

where they would render an ageney unable to fulfill a non-diserectionary

statutory purpose or require it to exceed its statutory authority.” Jn re

Operation of the Mo. River Sys. Litig., 421 F.3d 618, 630 (2005) (citing, inter

alia, Platte River).

Both Conservation Law Foundation and Defenders of Wildlife are thus fully

consistent with the holding in American Forest that Section 7(a2) requires

federal agencies “to channel their e.r/stivg authority in a particular direction”

but does net supersede contrary statutory commands. 137 F.5d at 299. But

even if the court of appeals’ understanding of Conservation Law Foundation

and Defenders of Wildlife were correct, the conflict with the decisions in Platte

River and American Forest would still warrant this Court's review.

22

by Section 7(a)(2) of the ESA. See App. 25a-26a. The court

stated that, “[b]y relying on [the FWS BiOp’s] line of reasoning

after determining that it did have a consultation obligation, the

EPA decided aawteren consult but had no authority to do

anything concerning the matter about which it had to consult.”

App. 25a. The court explained that such a position would be

contrary to the text of Section 7(a)(2) of the ESA, which “makes

no legal distinction between the trigger for its requirement that

agencies consult with FWS and the trigger for its requirement

that agencies shape their actions so as not te jeopardize

endangered species.” App. 26a. ——

The court of appeals was correct in stating that the no-

jeopardy and consultation requirements of Section 7(a)(2) go

hand in hand, but ef. American Forest, 137 F.3d at 298 n.6

(suggesting possible distinction between consulting obligations

and substantive powers), and that Section 7(a)(2) does not

require federal agencies to consult about conduct to which the

no-jeopardy mandate does not apply. The court was also correct

that the course of agency proceedings in this case reflected a

degree of confusion regarding the ESA’s application to the

NPDES transfer decision. EPA’s prior uncertainty, however,

does net cast doubt on the lawfulness of its ultimate decision to

grant Arizona’s transfer application, and the relevant federal

agencies have since clarified their understanding of the legal

principles that govern in this setting.

a. Section 7(a)(2) of the ESA states that “leJach Federal

agency shall, in consultation with and with the assistance of the

Secretary, insure that any [agency action] is not likely to jeo-

pardize the continued existence of any endangered species or

threatened species.” 16 U.S.C. 1536(a)(2). That phrasing makes

clear that “consultation” with FWS or NMFS is not an end in

itself, but a means of ensuring compliance with Section 7(a)(2)'s

substantive no-jeopardy mandate. Once it is confirmed that an

agency is compelled by another federal law to engage in

23

particular conduct, without regard to the effect of that conduct

on endangered or threatened species, Section 7(a)(2) of the ESA

does not require the agency to engage in consultation concerning

species-related impacts that it has no authority to prevent. Cf.

Public Citizen, 541 U.S. at 767-769 (holding that, under the “rule

_of reason” implicit in NEPA, a federal agency is not required to

prepare an EIS assessing the environmental impacts of an action

that it is legally obligated to perform).

b. In and of itself, EPA’s decision to initiate consultation

with FWS concerning Arizona’s transfer application was not

inconsistent with FWS’s ultimate determination that any harm

to listed species that the transfer might entail was legally

attributable to Congress rather than to EPA. Neither the ESA

nor the CWA prohibits a federal agency from seeking the views

of FWS or NMFS concerning the effects on listed species of

conduct that the CWA requires, even though consultation in

those circumstances would not serve its usual purpose of faci-

litating compliance with Section 7(a)(2)’s no-jeopardy require-

ment. And when an agency is uncertain whether the ESA’s no-

jeopardy mandate applies to particular conduct, consultation

with FWS or NMFS is an appropriate means of resolving that

question. See App. 73a (Kozinski, J., dissenting from denial of

rehearing en banc).”

At both the beginning and the end of its consideration of

Arizona’s transfer application, however, EPA expressed the view

that consultation concerning that application was required by the

ESA. Thus, in soliciting comments on the transfer application,

EPA described the no-jeopardy mandate of Section 7(a)(2) of the

ESA and stated that “|t}he approval of the State permitting

program under section 402 of the Clean Water Act is a federal

action subject to this requirement.” 67 Fed. Reg. at 49,919. And

~ In some cases, moreover, it may require significant analysis to determine

whether a potential effect flows from a mandatory action or a related

diseretionary judgment.

24

in the Federal Register notice that announced EPA’s approval of

the State’s application, the agency stated that “[i]ssuance of the

biological opinion * * * concludes the consultation process

required by ESA section 7(a)(2).” 67 Fed. Reg. at 79,630."

The FWS BiOp did not discuss 50 C.F.R. 402.03, and it did

not address the question whether the consultation that produced

the BiOp was required by the ESA. The BiOp’s no-jeopardy

finding, however, was grounded in substantial part on FWS’s

conclusion that, even if Arizona’s administration of the NPDES

program proved to be less protective of listed species than the

prior EPA regime, that disparity would not be “caused” by

EPA’s approval of the transfer, but instead would be attributable

to “Congress’ decision to grant States the right to administer

these programs under state law provided the State’s program

meets the requirements of 402(b) of the Clean Water Act.” C.A.

App. 224. Because Section 7(a)(2)’s consultation requirement is

intended to facilitate compliance with the no-jeopardy mandate

and therefore applies only to conduct that is properly attri-

butable to the agency itself, FWS’s causation analysis logically

implies that consultation regarding Arizona’s transfer application

was not compelled by the ESA. EPA’s failure at that time to

recognize the full implications of FWS’s causation analysis,

however, does not cast doubt on the legality of the challenged

transfer decision. FWS’s analysis reflects a correct under-

standing of the causation principles that govern in this area, and

it provides a fully sufficient basis for concluding that approval of

* EPA had made similar statements in considering some prior state

applications for transfer of NPDES permitting authority. See 64 Fed. Reg.

73,552, 73,554-73,555 (1999) (requesting comment on Maine application); 66

Fed. Reg. 12,791, 12,793-12,791 (2001) (approving the same? 63 Fed. Reg,

33,657-35,658 (199S) (requesting comment and approving public hearing on

Texas application); 61 Fed. Reg. 65,047, 65,053 (1996) (approving Oklahoma

application); id. at 47,932, 47.934-47.935 (requesting comment on Louisiana

application). See also App. 7a-Sa 1.3.

25

Arizona’s transfer application would not jeopardize any listed

species. See pp. 11-13, supra."

ce. The relevant federal agencies recently clarified their

positions concerning the applicability of Section 7(a)(2) of the

ESA to EPA’s NPDES transfer decisions under the CWA after

the State of Alaska submitted an application for transfer of

NPDES permitting authority. In connection with that

application, EPA requested confirmation of its current view that,

because Section 402(b) of the CWA requires that the State’s

application be granted if the CWA criteria are satisfied, the

decision whether to approve the transfer is not subject to the no-

jeopardy and consultation requirements of Section 7(a)(2) of the

ESA. See App. 93a-102a. FWS and NMFS have confirmed that

they share that understanding of the relevant statutory pro-

visions. See App. 103-116a. FWS and NMFS have further con-

firmed that, because the CWA requires that transfer applications

must be granted under specified circumstances, EPA lacks

“discretionary Federal involvement or control,” within the

meaning of 50 C.F.R. 402.03, over the transfer decision once the

’ Moreover, despite the government's reluctance to urge the court of

appeals to rest its decision on the view that Section 7(a)(2) is altogether

inapplicable to the mandatory transfer decision (and despite the Ninth Circuit's

failure to accede to the government's request for further briefing on the subject

if the Ninth Circuit reached the issue), there is no obstacle to this Court's

review. Both the State of Arizona and private intervenors squarely raised the

issue, and the Ninth Circuit squarely resolved it, so the issue was both pressed

and passed on below. Of course, the Ninth Circuit need not have reached tnis

issue at all and could have rested its decision on the inconsistency it found in

the government’s analysis of the consultation and jeopardy issues. This Court

should at a minunum vacate the Ninth Circuit's judgment insofar as it goes

bevond ordering a remand to the agency to resolve the inconsistency the panel

discussed in Part L1.B of its opinion, App. 23a-28a. But because the govern-

ment has now resolved any such inconsistency and made clear that Section

Tian2) does not apply to the mandatory action at issue in this case for either

consultation or no-jeopardy purposes (see pp. 25-26, «fra; App. 93a-116a), the

better course is for the Court to resolve that question.

26

CWA criteria are met, and EPA’s approval is not the legal

“cause,” within the meaning of 50 C.F.R. 402.02, of any impacts

on listed species that may result from a state-issued NPDES

permit. See App. 105a-106a, 109a-110a, 114a-115a.

This Court has recognized that the Secretaries of the Interior

and of Commerce are charged with primary responsibility for

administering the ESA, and that their construction of ambiguous

ESA provisions is entitled to judicial deference. See Sweet

Home, 515 U.S. at 703-704; p. 18, supra. The recent FWS and

NMFS communications regarding Alaska’s pending transfer

application reflect those agencies’ considered interpretations of

16 U.S.C. 1536(a)(2), and of 50 C.F.R. 402.02 and 402.03,

published regulations promulgated jointly by the two agencies in

1986 after notice-and-comment rulemaking. Because the respon-

sible agencies have clearly stated their position that neither the

consultation requirement nor the no-jeopardy mandate of

Section 7(a)(2) of the ESA applies to EPA’s consideration of state

NPDES transfer applications, and because EPA’s prior mistaken

view that it was required to consult about Arizona’s application

does not cast doubt on the legality of the transfer decision

challenged in this case, EPA’s earlier misunderstanding on that

point poses no obstacle to this Court’s review of the Ninth

Circuit’s erroneous ruling. In light of the acknowledged circuit

conflict and the broad significance of that ruling, review by this

Court is warranted.

27

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted.

PAUL D. CLEMENT

Solicitor General

SUE ELLEN WOOLDRIDGE

Assistant Attorney General

EDWIN S. KNEEDLER

Deputy Solicitor General

ROGER R. MARTELLA, JR. MALCOLM L. STEWART

Acting General Counsel Assistant to the Solicitor

MICHAEL G. LEE General

Attorney ANDREW C. MERGEN

Environmental Protection DAVID wl SHILTON

Agency Attorneys

OCTOBER 2006

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