Respondents Brief — Environmental Protection Agency v. Defenders of Wildlife
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Nos. 06-5-10, 06-5 19
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NATIONAL ASSOCTATION OF HOME BULLDERS. ofa
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DEFENDERS OF WILDER R 6 4
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UNITED STATES ENVIRONMENTAL
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OPP ENDERS OF WILDLIFE
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On Writs Of Certiorari To The
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For The Ninth Circuit
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QUESTIONS PRESENTED
1. Whether the court of appeals correctly held that EPA's
decision to transfer permitting authority to Arizona under
Section 402(b) of the Clean Water Act was arbitrary and
capricious because it was based on inconsistent interpreta-
tions of Section 7(a)(2) of the Endangered Species Act; and,
if so, whether the court of appeals should have remanded
to EPA for further proceedings without ruling on the
interpretation of Section 7(a)(2).
2. Whether EPA may raise in this Court a rationale for
avoiding compliance with Section 7(a)(2) of the Endan-
gered Species Act, 16 U.S.C. § 1536(a)(2), that EPA not
only failed to rely on during the administrative proceed-
ings and before the Ninth Circuit issued its ruling, but
which the agency expressly disavowed in the administra-
tive proceedings and advised the court of appeals panel it
was not raising.
3 Whether EPA must comply with Section 7(a)(2) of the
Endangered Species Act when EPA authc "izes States to
administer the Clean Water Act permitting program,
where Section 7(a)(2)’s requirements apply to “any action
authorized, funded, or catebeat by a federal agency, 16
U.S.C. § 1536(a)(2), and this Court has already construed
this language as “admit|ting] of no exception.” TVA v. Hill,
437 U.S. 153, 173 (1978).
ii
CORPORATE DISCLOSURE STATEMENT
The Corporate Disclosure Statement in respondents’
Brief in Opposition to Petitions for a Writ of Certiorari
remains valid.
TABLE OF CONTENTS
Page
QUESTIONS PRESENTED ...........::eccccsessesenetennesesssseees i
CORPORATE DISCLOSURE STATEMENT .............++ ii
TABLE OF AUTHORITIES ............:cccsessseeceeeerneeseeesesenes Vv
STATEMENT. ...00.000ccccccccoscssesssesscoscscscsscorvesssncsssosssensoosees 1
A. Section 7 Of The Endangered Species Act......... 2
B. Pertinent Provisions Of The CWA .........::0:08+ 6
C. EPA’s Past Successful Compliance With Section
7(a(2) And The CWA In Making NPDES Trans-
eee Th ccc ccccncsnctsasetesnecensscnersennncssesasesssoones 10
D. EPA’s Internally Inconsistent Approach To
Section 7(a)(2) When Considering Arizona’s
Application...........:::sesesenerseereeeeserscesssnennanenennen es 12
E. Proceedings Below.........:.:scccssssescseeesseeeenenenenees 18
SUMMARY OF ARGUMENT. ..........:cccceeeeeceerereeeeeeeseeeees 20
ARGUMENT. .,......00000ccccccccccccscssseccscosoccrersccesvsnsssssssonssessts 22
I. THE COURT OF APPEALS CORRECTLY
HELD THAT EPA'S DECISION WAS ARBI-
TRARY AND CAPRICIOUS AND THE CASE
SHOULD BE REMANDED ON THAT BASIS.... 22
A. EPA Now Concedes That Its Approach To
Section 7(a)(2) Was Internally Inconsistent
And Confusing ..........:ccccccesssseeeeaneeneenerseerenees 22
B. EPA Cannot Avoid A Remand Based On Its
Extra-Record Post Hoc Explanation ........-.. 24
C. EPA’s “Harmless Error” Argument Is
ieee - __..... csssedsndsonseusmmenepinsaaesenasennnsiess 27
iv
TABLE OF CONTENTS - Continued
Page
Il. IN MAKING TRANSFER DECISIONS, EPA
MUST COMPLY WITH SECTION 7(a)(2).........
A. Compliance With Section 7(a)(2) Is Re-
quired By The Plain Language Of Section
7(aX(2), This Court’s Ruling In Hill, And
Congress’s Subsequent Ratification Of
1. Plain Language Of Section 7(a)(2).........
Bee ER GIN i ciiseninitenicnsnenonnniniinonene
ee PN: SU ciielnsicinistiiicehicindionsininnpdonesiviensiinnsnetinn
4
. Congress’s Ratification Of Hill And
Creation Of The Endangered Species
Committee To Resolve Conflicts Be-
tween Section 7(a)(2) And Other Statu-
NE ID iicsiccisciliicteiieiiininintiniaenniveinnnnns
ERE TEE EE ene Sa See ae ee eo ee eR
TABLE OF AUTHORITIES
Page
FEDERAL CASES
Air Courier Conference of America v. America
Postal Workers Union, 498 U.S. 517 (1991)... 32
Alaska Professional Hunters Association v. FAA,
177 F.3d 1030 (D.C. Cir. 1999) ......--:ccseeeeeeeereerennneenenennes 28
American Forest & Paper Association v. EPA, 137
F.3d 291 (Sth Cir. 1998)............cccccceeeceeeeceeeseeeeeeeeeeeeeerees 12
American Textile Manufacturers Institute, Inc. v.
Donovan, 452 U.S. 490 (1981)......cccccceeeertrereeeeseeeeeeeeees 26
Arkansas v. Oklahoma, 503 U.S. 91 (1992)... 6, 7, 8, 9, 46
Auer v. Robbins, 519 U.S. 452 (1997) .......cccseseeeseeeeeeeeeerens 27
Babbitt v. Sweet Home Chapter of Communities for
a Great Oregon, 515 U.S. 687 (1995) ......ecrecreeees 3, 35, 38
Bates v. United States, 522 U.S. 23 (1997) ......seeseeeeereeees 37
Bennett v. Spear, 520 U.S. 154 (1997) .....cececeeeceee 5, 34, 37
Board of Governors of the Federal Reserve System v.
Dimension Financial Corp., 474 U.S. 361 (1986)......... 46
Burlington Truck Lines v. U.S., 371 U.S. 156 (1962) .....25, 26
Chevron, U.S.A. v. Natural Resources Defense
Council, 467 U.S. 837 (1984)........cceceseeeeeeereeeereennennenennes 33
Christensen v. Harris County, 529 U.S. 576 (2000).......... 33
Citizens to Preserve Overton Park v. Volpe, 401 U.S.
BO CBBTAD occccoscessscceescccesvsccsecensosesscinsosenssscsnsscnsnanennenaaenes 25
Dep't of Hous. and Urban Dev. v. Rucker, 535 U.S.
TBE (BOOB) 0.0000cccccorcccccccecesscsvooesssccosscscosssosessscossssososvossses 34
vi
TABLE OF AUTHORITIES — Continued
Page
Department of Transportation v. Public Citizen, 541
ance cernacnanes 21, 47, 48, 49
EPA v. California ex rel. State Water Resources
Control Board, 426 U.S. 200 (1976)............ccccceceeeeeeeeeeees 7
Florida Power & Light Corp. v. Lerion, 470 U.S.
ES en 24
Gerber v. Norton, 294 F.3d 173 (D.C. Cir. 2002)............... 31
Gonzales v. Oregon, 126 S. Ct. 904 (2006) .........cccecceeeeeees 33
Gonzales v. Thomas, 126 S. Ct. 1613 (2006)................c000 24
Hormel v. Helvering, 312 U.S. 522 (1941) .......cccccccseeeeenes 28
Merrill Lynch, Pierce, Fenner & Smith v. Dabit, 126
TT Te 43
Motor Vehicle Manufacturers Association v. State
Farm Mutual Automobile Insurance Co., 463
ee 23, 46
Mount Graham Coalition v. Thomas, 89 F.3d 554
EE oa 45
National Cable and Telecomm. Association v. Brand
X Internet Services, 545 U.S. 967 (2005).........ccccccceeeeees 30
New England Coalition on Nuclear Pollution v.
NRC, 727 F.2d 1127 (D.C. Cir. 1984) ..........cccceeceeeeeeeeees 24
Norton v. Southern Utah Wilderness Alliance, 542
ea 47
PDK Labs., Inc. v. United States DEA, 362 F.3d 786
TET Tne 28, 32
Posadas v. National City Bank of New York, 296
SI ITT ssistiacedinntepnatnsennnnennseneqnapensqneseessucqcnsenes 45
vii
TABLE OF AUTHORITIES -~ Continued
Page
Reno v. American-Arab Anti-Discrimination Com-
mittee, 525 US. 471 (1908) ..............crccsessseseosoroescsererees 33
Robinson v. Shell Oil Co., 519 U.S. 337 (1997) ................ 35
Russello v. United States, 464 U.S. 16 (1983).............. 36, 37
SEC vu. Chenery, 332 U.S. 194 (1947)... 424, 45
Sierra Club v. U.S. Fish and Wildlife Service, 245
ce 37
TVA v. Hill, 437 U.S. 153 (1978)... ......ccceccessseessseseees passim
Train v. New York City, 420 U.S. 35 (1975)... eeeeee 39
United States v. Mead Corp., 533 U.S. 218 (2001)........... 33
Watt v. Alaska, 451 U.S. 259 (1981)..............cccccceeceeeeeeeeees 43
Weinberger v. Romero-Barcelo, 456 U.S. 305 (1982).....21, 49
Witters v. Washington Department of Services for
the Blind, 474 U.S. 481 (1986)..............:::ccssesseersereeeeeees 27
Wygant v. Jackson Board of Education, 476 U.S.
Sy Gaia Miccencccncsninecninenusinineatiinteinmunnntniniemminnebeniines 27
FEDERAL STATUTES AND REGULATIONS
Clean Water Act,
Se Ne A recemansnemnncnnnnieintennnnnmnninacaiadeadines 6
Fy ts Oe ID coccctercntensnaseninniedsniensinbiiidiens 6,17
a ee Se erteercsntcicnencenceeneiinienenammmniemitnicindininaiveiin 7
ep es Oe Se Rixccusantcnrenmnetmmnncetimnnmmamennentnion 7
Be le Oe I ceininicsenintinntnincsrnnanieenncasiineiminiinsniidiens 8
BD DIS. © BaD cccscncnsessccnssevsemnensessssssessnssummccamnoenen 7,8
TABLE OF AUTHORITIES - Continued
Page
eT 7,8
TE 7
ey Oe Be entnicncninennnatinnienicaninniniuteianinianees passim
i 8
i n.. CCT 9
ae eI cicrsnasietninccccicincitininiuniaintianiainiaiitamsinatanitiaas 9
ee ee csissnienicintiticancinitinsteisniiininnaiitasiaaniiaitiaiaie 9
Endangered Species Act,
ee Oe SII. cnciteninicnisntianndnpsicanmiabiamiinaataitiinis 1,3
ee Sin prncecctncnsnerscmnasernssiiebtenininateeasin 1,3
a ee 0 Se rctenrenizesesnninconstinemnemncttaemnensiemtenies 1,3
Se SI Accececsncnicennttenennngnmmenensnntitaionnnatens 44
Sy ee SE i cennensiinineninnnissienenasenengnaninindintineuntiaie 3, 36
ee Oe I cenenencenennnnnectenssenecseitiensetmmenianins 36
a Oe samecasneniet passim
es Oe EID ceccirencencenentnctrennsenenniennnnminniasiini 35
es ee ED ccniccnnsnnsensnienantnndinsinnnnieamani 5
a 6, 43
es Oe i crrtinnnctnnscninctenetscnnnnuueisinionsanasiiiaiiis 6
ie Oe ED ieiccnensintciisniniccinininsnsciinnmmseniintineininaiia 6
ee ae vincicicancsinnntyeriniintdaieiaitaininiaitieniniaieaaaiaie 6
ee OP NEED cccrsetescnsrenmnninesenseinnmennmnennes 5
A 6, 43
BO WAAL, § BRITS cccccccccscvscscsssessessccnsesessesseees 15, 16
ix
TABLE OF AUTHORITIES — Continued
Page
National Environmental Policy Act,
es Be OIG ccrmccescnceenesesriecnnmenn 21
National Historic Preservation Act,
TEE TIUITIITI A ssshpiciniititnteiicidiitaiasiciabitannenicheandoninueinsatvoiitinin 31
FEDERAL REGULATIONS
I Un TTT iss iscisissirinindanrsiainatininsiaiaiiamipadimanaiaintiaeiin 9
ee Se icineneticnincsnesnmsccrieeiininmapnannnmnienees 9
ee sc Biiiiincnnnincrinenssenmemensnt miei 9, 28
Ne SIN nricneticnencsnnncennspensnennataninemennabnnmecmnenti 9
is ait CITT cctecinnieinechicnssenrnanbiptanianatiinammietnentmmedinideneameats 7
STi Ui ns csesiteneietieidenbanicnictaliniaitiiintasiiniamiibiniaieniiel 5, 8, 35
By SITE ccnntincesecuceincmmunnntnandieneieinmntnenimianinaionsd 45, 46
IIIT ccntnerusentininanngnnmsenanmnenenmmintermmetene 5
Rk eee 5,14
LTT TT TE 5
re ee rercccncrccnstnersnitinivtiennencccanien S caaiaie 5
Be TPIT TITTTTIIITsscirisirieariinrcipeitieepenienaneininsitiinntaniadiaeninummanionneNe 5
FEDERAL REGISTER NOTICES
51 Fed. Reg. 19,926 (June 3, 1986) .........cccccesseseeeseeeeee 24, 37
60 Fed. Reg. 25,718 (May 12, 1995)......ccccccscccsessssesesseeeees 10
G1 Fed. Reg. 65,047 (Dec. 10, 1996)........:..cssssesssssseeeeseveee: 10
63 Fed. Reg. 51,164 (Sept. 24, 1998) .....c.ccccccssssesseeeees 11, 12
TABLE OF AUTHORITIES — Continued
Page
64 Fed. Reg. 2,742 (Jan. 15, 1999).....c.cccccccccessssesseseeeseeeons 12
67 Fed. Reg. 79,629 (Dec. 30, 2002)..............:scceseeceeeeees 1, 21
LEGISLATIVE HISTORY
H.R. Rep. No. 92-911, 92d Cong., 2d Sess. (1972).............. 6
H.R. Rep. No. 93-412, 93d Cong., 1st Sess. (1973)............. 3
H.R. Rep. No. 95-1625, 95th Cong., 2d Sess. (1978)........... 4
Pub. 1,.-06-GSR, GB Bhat. STEB.......c.ccccccseccccsesesessccosesccccescess 42
S. Rep. No. 97-418, 97th Cong., 2d Sess. (1982)................. 4
a Ce, Ge Ce cccnccscnccsccnnnetnsscesenmmneneepnenssemen 41
MISCELLANEOUS
Kilbourne, The Endangered Species Act Under the
Microscope: A Closeup Look From a Litigator’s
Perspective, 21 Envtl. L. 499 (1991)..............cccssesseeeesenees 6
Webster’s New World Dictionary (1990)...................:c00000 34
1
STATEMENT
This case concerns the United States Environmental
Protection Agency’s (“EPA’s”) “final action authorizing
Arizona to implement the NPDES [National Pollutant
Discharge Elimination System] program,” 67 Fed. Reg.
79,629, 79,631 (Dec. 30, 2002), and whether, in taking that
action, EPA failed to comply with its duties under the
Endangered Species Act, 16 U.S.C. § 1531 et seq. (“ESA”).
Section 7(aX2) of the ESA provides that “lelach federal
agency shall, in consultation with and with the assistance
of the Secretary [of the Interior], insure that any action
authorized, funded, or carried out by such agency ... is
not likely to jeopardize the continued existence of any
endangered species or threatened species or result in the
destruction” of the “critical” habitat of a listed species. 16
U.S.C. § 1536(a)(2) (emphasis added).
The plain terms of section 7(a)(2) therefore apply to
EPA’s action and, indeed, this Court has already ruled that
the “language {of section 7] admits of no exception.” TVA v.
Hill, 437 U.S. 153, 173 (1978). Nonetheless, EPA and the
National Association of Home Builders (“NAHB”) contend
that section 7(a)(2) “does not apply” to EPA’s decisions on
whether to transfer NPDES authority regardless of
whether such transfers will lead to the extinction of
federally protected species. EPA Br. at 42. This position is
not only impossible to reconcile with the language and
purpose of section 7(a)(2), but it also conflicts with (1)
EPA’s statements in the decision documents under review,
(2) EPA’s position in the court of appeals, and (3) addi-
tional published statements of agency policy adopted
following public notice and comment proceedings.
2
According to petitioners, however, the Court should
overlook EPA’s conceded “confusion” and “misstatements of
law” in the record, EPA Br. at 42, 45, 46, and instead
“defer” to EPA’s extra-record post hoc “clarification” that
compliance with the ESA is never “required in this con-
text.” Id. at 38, 49. To endorse that position the Court
would be compelled to discard fundamental principles of
administrative law and judicial review, contort the lan-
guage of the ESA beyond recognition, and ignore the
Court’s own ruling and reasoning in Hill. Rather, the case
should be remanded to EPA for further administrative
proceedings so that EPA may “clarify” its position based on
a full administrative record, including important factual
and legal considerations unaddressed in the extra-record
explanation on which EPA asks the Court to rely.
To place these issues in legal and factual context,
respondents will first summarize the “complementary”
wildlife protection provisions of the two environmental
statutes at issue, NAHB App. 274, and then describe EPA’s
shifting positions on compliance with section 7(a)(2).
A. Section 7 Of The Endangered Species Act
When Congress enacted the ESA in 1973, its “plain
intent ... was to halt and reverse the trend towards
species extinction, whatever the cost.” Hill, 437 U.S. at
184. The House Report relied on in Hill explained that
“[fJrom all evidence available to us, it appears that the
pace of disappearance of species is accelerating” and that
[from the most narrow possible point of view, it
is in the best interests of mankind to minimize ~
the loss of genetic variations. The reason is sim-
ple: they are potential resources. They are keys
3
to puzzles which we cannot solve, and may pro-
vide answers to questions which we have not yet
learned to ask ... Who knows, or can say, what
potential cures for cancer or other scourges, pre-
sent or future, may lie locked up in the struc-
tures of plants which may yet to be [] discovered
... Sheer self-interest impels us to be cautious.
H.R. Rep. No. 93-412, 93d Cong., 1st Sess. (1973) (“1973
House Report”), reprinted in A Legislative History of the
Endangered Species Act of 1973, As Amended in 1976, 1978,
1979, and 1980, at 144 (1982) (hereafter “ESA Leg. Hist.”).
Congress determined that the “principal” threats to
species are “pollution, destruction of habitat and the pres-
sures of trade” and that strong federal legislation was
essential because “protection of endangered species is not a
matter that can be handled in the absence of coherent
national and international policies. .. .” 1973 House Report,
ESA Leg. Hist. at 141, 146. Congress therefore passed “ ‘the
most comprehensive legislation for the preservation of
endangered species ever enacted by any nation.’” Babbitt v.
Sweet Home Chapter of Communities for a Great Oregon,
515 U.S. 687, 698 (1995) (quoting Hill, 437 U.S. at 180).
The ESA “finds” that “species of fish, wildlife, and plants...
in danger of or threatened with extinction” are of
“lalesthetic, ecological, educational, historical, recreational,
and scientific value to the Nation and its people,” and the
Act’s “purpose” is to provide a “program for the conserva-
tion” of such species, which means recovering them until
the “measures provided pursuant to [this Act] are no longer
necessary.” 16 U.S.C. §§ 1531(a), (b); id. at § 1532(3).
The statute’s “broad purpose,” Sweet Home, 515 U.S. at
698, is reflected in section 7, which “provides a particularly
good gauge of congressional intent.” Hill, 437 U.S. at 181.
4
In Hill, the Court held that section 7’s “very words affirma-
tively command all federal agencies ‘to insure that actions
authorized, funded, or carried out by them do not jeopardize
the continued existence’ of an endangered species or ‘result
in the destruction or modification of habitat of such spe-
cies.’” id. at 173 (emphasis in original; internal citation
omitted). The Court construed this language as flatly
“‘prohibit{ing] {a] federal agency from taking action which
does jeopardize the status of endangered species.’” Jd. at
179 (emphasis in original; internal quotation omitted).
In 1978, Congress ratified Hill’s plain language reading
of section 7 and established a new mechanism for address-
ing unavoidable “conflicts” between the “primary missions”
of federal agencies and the prohibition in section 7 on
agency actions that jeopardize species and destroy critical
habitat. H.R. Rep. No. 95-1625, 95th Cong., 2d Sess. (1978)
(“1978 House Report”), ESA Leg. Hist. at 734, 737. While
finding that the “consultation process” required by section 7
“can resolve many if not most of the conflicts that might
develop under the Act,” the relevant Congressional commit-
tees recognized that “there will continue to be some Feder-
ally authorized activities that cannot be modified in a
manner which will avoid a conflict with a listed species.” Jd.
at 737 (emphasis added). Accordingly, to address “those
cases where a Federal action cannot be completed ...
without directly conflicting with the requirements of
Section 7,” id., the 1978 amendments created a “process by
which actions authorized, funded, or carried out by Federal
agencies could be exempted from the provisions of the Act.”
S. Rep. No. 97-418, 97th Cong., 2d Sess. (1982) (“1982
Senate Report”), reprinted in NAHB App. 531.
Under Fish and Wildlife Service (“FWS” or “Service”)
regulations, each “action agency” triggers the section 7
5
process by determining if its action “may affect” a listed
species or critical habitat; if so, the agency must conduct
“formal consultation” with FWS, unless the Service concurs
that the action is unlikely to “adversely affect” the species.
50 C.F.R. § 402.14(a), (b). The formal consultation process
culminates in a “Biological Opinion” that “[e]valuate[s] the
effects of the action,” and determines whether it is “likely to
jeopardize” any listed species or impair critica] habitat. Jd.
at §§ 402.14(g)(3), (4); see also Bennett v. Spear, 520 U.S.
154, 158 (1997). This analysis must include all “direct,”
“cumulative,” and “indirect effects,” which are those “caused
by the proposed action and are later in time, but still are
reasonably certain to occur.” 50 C.F.R. § 402.02. The agency
must then determine “whether and in what manner to
proceed,” id. at § 402.15(a), to ensure that the “action” does
not “jeopardize” any listed species or “result in” the destruc-
tion or “adverse modification” of “critical” habitat. 16 U.S.C.
§ 1536(a)(2).
For example, if the FWS finds that the action will
“result in” destruction of critical habitat, the action agency
must determine whether to adopt any “reasonable and
prudent alternatives” proposed by the Service to avoid
that result. 16 U.S.C. § 1536(b)(3)(A). If there are no such
“alternatives” within the agency’s statutory authority, the
recourse for the agency or other affected parties is to seek
an exemption from the Endangered Species Committee.
Id. at § 1536(h)(1 (A)D).
Pursuant to the exemption process, any federal
agency, “permit or license applicant,” or the “Governor of
the State in which an agency action will occur,” may
“apply ... for an exemption” if FWS determines, after
consultation, that the “agency action would violate” section
7(a\(2) but the Service and agency are unable to develop a
6
“reasonable and prudent alternative” the agency can
implement to avoid that result. 16 U.S.C. §§ 1536(g)(1),
(3). The ultimate decision to grant such an exemption is
vested in an “Endangered Species Committee” composed of
high-ranking federal officials, including the Administrator
of EPA, and one representative from “each affected State.”
Id. at §§ 1536(e)(1), (3). If the Committee grants an ex-
emption, it also “establish[es]” measures “to minimize the
adverse effects of the agency action” on endangered species
regardless of whether the agency has authority to imple-
ment such measures under its own statute. Jd. at
§ 1536(h)(1)(B).’
B. Pertinent Provisions Of The CWA
The “broad purpose” of the Clean Water Act (“CWA”) is
“‘to restore and maintain the chemical, physical, and
biological integrity of the Nation’s waters.’” Arkansas v.
Oklahoma, 503 U.S. 91, 105-06 (1992) (quoting 33 U.S.C.
§ 1251(a)) (emphasis added). Accordingly, the CWA, enacted
in 1972, establishes a “national goal” of achieving “water
quality which provides for the protection and propagation of
fish, shellfish, and wildlife. . . .” 33 U.S.C. § 1251(a)(2).’
* Because of its extraordinary power to authorize a federal action
that may result in the extinction of a species, the Committee is “eu-
phemistically known as the ‘God’ committee.” Kilbourne, The Endan-
gered Species Act Under the Microscope: A Closeup Look From a
Litigator’s Perspective, 21 Envt'l L. 499, 560-61 (1991).
* See also H.R. Rep. No. 92-911, 92d Cong., 2d Sess. 76 (1972) (The
CWA’'s “objective” is the “restoration and maintenance of the chemical,
physical, and biological integrity of the Nation’s waters ... The word
‘integrity’... refers to a condition in which the natural structure and
function of ecosystems is maintained.”).
The CWA “anticipates a partnership between the
States and the Federal Government” and “provides for two
sets of water quality measures.” Arkansas, 503 U.S. at 101
(internal citation omitted). First, the CWA requires EPA to
issue technology-based “(e]ffluent limitations,” 33 U.S.C.
§ 1311, including limitations needed to “assure .. . protec-
tion and propagation of a balanced population of shellfish,
fish, and wildlife.” Jd. at § 1312(a). Second, the States and
EPA jointly develop “[wlater quality standards” so that
pollution sources “may be further regulated to prevent
water quality from falling below acceptable levels.” EPA v.
California ex rel. State Water Resources Control Bd., 426
U.S. 200, 205 n.12 (1976). These standards must also
“tak[e] into consideration the[] use and value” of navigable
waters for the “propagation of fish and wildlife.” 33 U.S.C.
§ 1313(c)(2)(A).
States must submit proposed water quality standards
for review by EPA, and if the “State fails to comply with
[EPA’s] recommendation, the Act authorizes the EPA to
promulgate water quality standards for the State.” Arkan-
sas, 503 U.S. at 101. Hence, the States and, if necessary,
EPA establish water quality standards that provide “for
the protection and propagation of fish, shellfish, and
wildlife.” 40 C.F.R. § 131.2.
The NPDES program is the “primary means for
enforcing these limitations and standards,” Arkansas, 503
U.S. at 101, because the CWA prohibits point sources from
discharging pollutants into navigable waters without a
permit. See 33 U.S.C. § 1311(a). Section 402 of the Act, 33
U.S.C. § 1342, “establishes the NPDES permitting regime,
and describes two types of permitting systems: state
permit programs that must satisfy federal requirements
and be approved by the EPA, and a federal program
8
administered by the EPA.” Arkansas, 503 U.S. at 105.
Thus, the States play an important role in implementing
the program, but “Congress has vested in [EPA] broad
discretion to establish conditions for NPDES permits,” and
“l(sjimilarly, Congress preserved for [EPA] broad authority
to oversee state permit programs|.|” Id. (emphasis added).
Consistent with EPA’s “broad authority” over the
program, it is not the case that Congress imposed a minis-
terial duty on EPA to transfer permitting authority to the
States. To the contrary, while section 402(b)(1) provides
that EPA “shall approve” the transfer of permitting au-
thority when EPA finds that a State has met nine criteria,
EPA can and does employ considerable discretion — or, in
the government’s words, an “exercise of judgment,” EPA
Br. at 17 - in assessing and applying those criteria, which
range from the specific to the very general. Of particular
relevance here, several of the statutory factors as to which
EPA exercises “judgment” encompass the wildlife-related
concerns that are manifested throughout the CWA scheme.
For example, one general criterion is whether the
State has “adequate authority” to “apply, and insure
‘compliance with” multiple provisions of the CWA. 33
U.S.C. § 1342(b)(1)(A). In turn, one of those provisions
concerns any “effluent limitations” established for the
“protection and propagation of a balanced population of
shellfish, fish and wildlife....” Jd. at § 1312(a). Another
requires that all permits satisfy “any applicable water
quality standard[s],” id. at § 1311(b)(1)(C), including those
that protect the “use and value” of navigable water bodies
“for ... propagation of fish and wildlife.” Jd. at
§ 1313(c)(2)(A). Through these and other transfer criteria,
therefore, EPA has the responsibility under the CWA to
evaluate the adequacy of a State’s program to provide for
9
the “protection and propagation of fish, shellfish, and
wildlife.” If EPA “determines” that a State’s program is not
“adequate” in that or any other respect, it denies the
transfer. Jd. at § 1342(b).”
Even after EPA authorizes a State to administer the
NPDES program, “Congress intended to grant the [EPA]
discretion in [its] oversight of the issuance of NPDES
permits.” Arkansas, 503 U.S. at 106; see also NAHB App.
97. The State must advise EPA of each permit it “pro-
pose[s]” to issue, 33 U.S.C. § 1342(d)(1), and EPA may
“object” to any permit. Jd. at § 1342(d)(2); see also 40
C.F.R. § 123.44(c). The State must then either address
EPA’s concerns or authority over the permit reverts to
EPA. 33 U.S.C. § 1342(d)(4). In addition, the State must
enter into a Memorandum of Agreement with EPA that is
“consistent with EPA’s statutory oversight responsibility”
and “include{s] other terms, conditions, or agreements”
deemed “relevant to the administration and enforcement
of the State’s regulatory program.” 40 C.F.R. § 123.24(a).
States must also provide draft permits to the FWS and
all other “Federal and State agencies with jurisdiction
over fish, shellfish, and wildlife resources....” Jd. at
§ 124.10(c)(iii).
* That EPA in fact exercises considerable discretion in determining
whether, and on what terms, to delegate NPDES authority to a State is
also reflected in EPA's solicitation and consideration of public comments
on a State’s application to administer the NPDES program. See 40
C.F.R. § 123.61(b); see also Joint Appendix (“J.A.”) at 194-256 (address-
ing public comments on Arizona’s application).
10
C. EPA’s Past Successful Compliance With Section
7(a)(2) And The CWA In Making NPDES Transfer
Decisions
EPA's new position that it is impossible to comply with
both section 7(a)(2) of the ESA and section 402(b)(1) of the
CWA is directly at odds with EPA’s and FWS’s past decla-
rations and actions. In public notice and comment proceed-
ings, EPA has repeatedly determined that it must comply
with section 7(a)(2) in making transfer decisions, and the
agencies have successfully used the section 7(a)(2) consul-
tation process to evaluate and mitigate the potential
adverse effects of such decisions on federally listed species.
With regard to Florida’s application, for example, the
federal agencies, together with the State, agreed to a
process “for close coordination between EPA, the State,
and the Service|] to ensure that the state-issued permits
are not likely to jeopardize the continued existence of
Federally listed species.” 60 Fed. Reg. 25,718, 25,719 (May
12, 1995). In connection with Oklahoma's application, EPA
and FWS complied with section 7(a)(2) and agreed, along
with the State, that FWS would have an opportunity to
“confer on permits which are likely to affect federally
listed species.” 61 Fed. Reg. 65,047, 65,053 (Dec. 10, 1996).
In response to comments, EPA declared that “consultation
conducted on the authorization of a state NPDES program
is consistent with the intent, definitions and the require-
ments of the ESA and CWA,” and that “[t]he approval of a
state program under section 402 of the CWA is a federal
authorization and not simply a review of the state’s
documents. EPA views the approval as ‘discretionary.’” Jd.
at 65,051.
Likewise, before EPA granted Texas’s application,
FWS issued a Biologicai Opinion that found that the
11
State’s water quality “standards require that permits be
written in such a manner that would avoid jeopardy to
aquatic and aquatic dependent wildlife (including listed
species)... .” 63 Fed. Reg. 51,164, 51,196 (Sept. 24, 1998).
EPA and FWS also “developed procedures for ensuring the
protection of endangered and threatened species” following
the transfer of authority, including by “facilitatling]
coordination among the federal agencies and timely
communication of information and recommendations to
the State.” Jd. at 51,198. In response to public comments,
EPA again stated that “section 7 does apply to its ac-
tion... .” Id.
In 2001, after again soliciting public comment, EPA
and FWS jointly published in the Federal Register a
“Memorandum of Agreement” that “addressled] inter-
agency coordination under” the CWA and ESA, NAHB
App. 245, and “ensureld] that EPA actions meet the
substantive requirements of section 7(a)(2). ...” Jd. at 253.
Emphasizing that the “ESA requires the involvement of all
Federal agencies in the protection and recovery of our
Nation’s unique biological resources,” id. at 274, the
agencies confirmed that “EPA’s current practice is to
consult with the Services where EPA determines that
approval of a State’s or Tribe’s application to administer
the NPDES program may affect federally listed species.”
Id. at 260."
*“ EPA’s compliance with section 7(a\(2) was consistent with
positions it took in cases brought by industry groups in the Fifth and
Tenth Circuits. EPA argued that consultation with FWS is necessary to
“satisfy EPA’s obligations under ESA section 7(a\2),” and that the
contrary position is a “myopic approach [that] ignores the plain
language of ESA section 7(a\(2), the Supreme Court's expansive reading
of agency action in section 7, the broad regulatory definition of ‘action’
(Continued on following page)
12
D. EPA's Internally Inconsistent Approach To Section
-7(a)(2) When Considering Arizona’s Application
As the government acknowledges, the administrative
record reflects EPA’s “confusion,” to say the least, concern-
ing its section 7(aX(2) obligations in reviewing Arizona’s
transfer application. EPA Br. at 42. In fact, not only was
EPA’s position internally inconsistent, but there were
serious conflicts between EPA and FWS officials who
believed that without appropriate safeguards the transfer
could lead to the extinction of federally protected species.
1. In 2002, Arizona “submitted a request for [EPA's]
approval” to regulate “most discharges of pollutants
subject to the federal NPDES program,” including “storm
water point source discharges,” “industrial wastewater,”
and “discharges from federal facilities.” NAHB App. 543,
and ‘effects of the action’ in the ESA implementing regulations, and
EPA's role in approving state applications.” Brief for the Respondents at
29, 30, American Forest & Paper Ass’n v. EPA, No. 96-60874 (5th Cir.
1997) (hereafter “EPA 5th Cir. Br.”) (reproduced in Addendum to
Respondents’ Court of Appeals’ Reply Brief).
Neither the Fifth nor Tenth Circuits disagreed with EPA's position
that section 7 compliance is mandatory. The Tenth Circuit did not reach
the merits. The Fifth Circuit suggested that section 7(a)(2) does
“require{}] EPA to consult with FWS” before making an NPDES transfer
decision, American Forest & Paper Ass’n v. EPA, 137 F.3d 291, 298 (5th
Cir. 1998), but ruled against EPA on the narrower ground that EPA
could not “require” the State to consult with federal agencies regarding
the impact of state-issued permits on endangered species. Jd. at 297.
EPA subsequently explained to the public that it “believes that this case
was wrongly decided,” 64 Fed. Reg. 2,742, 2,746 (Jan. 15, 1999), but
EPA nonetheless complied with it by devising, along with FWS, species.
safeguards that did not impose any consultation duties directly on
States. See, e.g., 63 Fed. Reg. 51,164, 51,198 (“EPA and the Services
have developed procedures for ensuring the protection” of species that
“do not impose obligations, procedural or otherwise, on the State”).
13
550. Arizona also requested that the federal government
fund much of its program. Jd. at 567; J.A. 44.
When soliciting public comments, EPA stated that it
would “not make a final decision on [] program approval
until after ... completion of the ongoing consultations
with the [FWS] on effects program approval may have on
endangered or threatened species.” NAHB App. 546. As
before, EPA declared that
the ESA requires federal agencies to consult with
the U.S. Fish and Wildlife Service on the effects
of federal actions on endangered species. EPA
has determined that its action on the AZPDES
program application constitutes a federal action
that is subject to section 7 of the ESA. Section
7(a)(2) of the ESA places a statutory requirement
(separate and distinct from CWA section 402(b))
for EPA to ‘ * * * insure that any action... * * * is
not likely to jeopardize the continued existence of
any endangered species or threatened species’. . . .
Id. at 548 (emphasis added; ellipses in original).
EPA initiated section 7 consultation by providing FWS
with a “Biological Evaluation” that “discuss[ed] the effects
of [EPA’s] approval” of the Arizona program, and acknowl-
edged that “all Federally-listed [species] and critical
habitats in, adjacent to, or dependent on all surface waters
in Arizona may be affected by the action.” NAHB App. 587,
614. EPA attached a list of 60 federally listed species that
could be harmed by the transfer. Jd. at 621-23.
EPA recognized that projects requiring NPDES
permits may have “detrimental effect|s] on Federally-
listed species and habitats” and that an immediate conse-
quence of the transfer decision would be “a reduction in
14
the number of mechanisms available . . . to protect Feder-
ally-listed species,” i.e., “[iJn changing from a Federal
permitting program to a State permitting program, the
permit-related ESA Section 7 processes for consultation
will no longer apply.” NAHB App. 610, 615. EPA asserted,
however, that various measures would adequately protect
species in the absence of section 7 safeguards. Jd. at 617.
2. If FWS had concurred with this conclusion, the
consultation would have ended at that point. See 50 C.F.R.
§ 402.14(b). But FWS did not agree because its biologists
concluded that, in the absence of additional safeguards,
the transfer would in fact “result in significant effects to —
the[] survival and recovery” of various endangered species
“through destruction, degradation, and fragmentation of
their habitats.” J.A. 54; see also id. at 31.
For example, Service biologists explained that FWS
reviews of NPDES permits issued by EPA had been vital
in protecting the Southwestern willow flycatcher, a highly
endangered bird species dependent on river ecosystems in
Arizona. See 1A. 39, 43. Because the Service’s ability to
provide such essential protections would be lost upon
transfer of the NPDES program, Service biologists con-
cluded that, in the absence of agreed-on protections, the
transfer “could have a devastating effect” on survival of
the flycatcher. Jd. at 39. Service biologists expressed
similar concerns about the fate of other animal species,
such as bald eagles and certain endangered fish species.”
* FWS biologists believed that the transfer could harm both
aquatic and upland species that had in fact benefitted greatly from
section 7 consultations on NPDES permits. See, e.g., J.A. 41 (describing
potential adverse impacts on “eagle breeding areas”); id. at 52 (finding
that listed fish species “may be adversely affected”).
15
FWS scientists also concluded that without additional
safeguards the transfer would “appreciably reduce the
conservation status” of federally protected plants because
{glreat strides in minimizing the disturbance of
construction projects in the range of these species
to provide for their survival and recovery will be
diminished, if not lost ... [T]his action is more
than a shift in program authority; we will lose
our section 7 nexus for consultation, and con-
struction projects ... will destroy important
habitat and adversely affect listed species.
J.A. 46 (emphasis added). With regard to the Huachuca
water umbel, an aquatic plant “dependent on steady water
levels for habitat stability,” FWS biologists determined
that “[slection 7 consultations with EPA” on NPDES
permits “have allowed for the development of conservation
measures that minimize the impact of water withdrawals”
in critical habitat but that, in the absence of adequate
protections, the transfer of authority “could compromise
the water quantity in critical habitat, reducing the likeli-
hood of the long-term survival and recovery” of the species.
J.A. 49 (emphasis added).®
* Service biologists also concluded that the transfer could lead to
the rapid extinction of another plant endangered by ongoing habitat
destruction because, of the species’ dwindling habitat that had been
protected in some manner, nearly half had been “conserved through
conservation measures gained through section 7 consultation with EPA”
on NPDES permits and, “|wJith no conservation measures in place with
EPA and the State” tailored to the plant, the “species will be at risk of
severe decline.” J.A. 47-49. The biologists further found that no other
existing federal or states measures would address adverse effects to
listed plants because the ESA's general prohibition on “taking”
members of a listed species does not apply to plants on private land,
see 16 U.S.C. § 1538(a2)B), and there is no Arizona statute or
(Continued on following page)
16
3. EPA and FWS disagreed on how these serious
impacts should be addressed under section 7(a)(2). How-
ever, in contrast to the post hoc position EPA is now urging
— .e., that compliance with section 7(a)(2) “is not required”
on transfer applications under any circumstances, EPA Br.
at 49 - the agencies’ disagreement related to the scope of
the required analysis. EPA officials maintained that, while
they were required to comply with section 7(a)(2), the
Biological Opinion should focus on analyzing adverse
effects over which EPA believed it had statutory authority
under the CWA, i.e., adverse impacts “relating to both
aquatic and upland species if they are water quality-
related.” J.A. 143 (emphasis added).
In contrast, FWS took the position that, once consul-
tation is initiated, the “Service must analyze all potential
effects (i.e., direct, indirect, and cumulative effects),” and
that the “action agency’s ability to control those effects is
irrelevant to the analysis.” J.A. 143. FWS officials further
explained that, if such am analysis yielded a “jeopardy
determination” but the Service and EPA could not devise a
“reasonable and prudent alternative” that would avoid
extinction, EPA or Arizona could seek “an exemption via”
the Endangered Species Committee process. Id.’
regulation that forbids the destruction of federally listed plants. See
NAHB App. 57.
” See also J.A. 148 (“The indirect effects of future permitted actions
could result in a jeopardy biological opinion on EPA's approval of the
assumption by Arizona.”),; id. at 140 (“EPA has backtracked on [its]
commitment to consider both the direct and indirect effects ... [T]hey
will only address impacts to listed species directly related to water
quality.”).
17
4. The Biological Opinion that resulted from this
interagency dispute is a hybrid of the agencies’ legally
incompatible positions. The Opinion reiterates EPA’s and
FWS’s longstanding recognition that the “proposed ap-
proval” of a State permitting program is a federal “action”
subject to section 7(a)(2), and also that the ESA and CWA
are “consistent” statutory schemes. NAHB App. 82, 84.
Indeed, the document stresses that:
[t]he environmental protection goals of the CWA
contain specific references to protecting ‘fish,’
‘shellfish,’ ‘wildlife,’ and ‘aquatic life,’; these terms
clearly encompass federally listed and proposed
species. Section 101(a) provides as its goal to ‘re-
store and maintain the chemical, physical, and
biological integrity of the Nation’s waters,’ 33
U.S.C. § 1251(aX(2). This goal is consistent with
the ESA’s purpose of providing ‘a means whereby
the ecosystems upon which endangered species
and threatened species depend may be conserved.’
NAHB App. 84 (emphasis added).
The Opinion further states that “we |FWS] have
expressed concerns that the approval will result in a loss
of section 7 consultation-related conservation benefits” for
various species, NAHB App. 111-12, and that the “loss of
conservation benefits as an indirect effect will appreciably
reduce the conservation status” of several species. Id. at
112 (emphasis added); see also id. at 110, 111. The Opinion
also suggests that these anticipated adverse effects should
be addressed under section 7(a)(2) because “/rjegarding
causation, the FWS uses the ‘but for’ test. This test means
that a Federal action is the cause of an effect if... ‘but for’
the action the effect would not have occurred.” NAHB App.
112 (emphasis added). Yet, while recognizing that some
18
listed species would lose “conservation benefit(s]” that had
proven crucial to their survival, id., and that this loss of
protection would not occur “but for” the transfer decision,
the Opinion fails to analyze whether this impact will in
fact lead to species jeopardy or loss of critical habitat, or
whether the agencies should, as in past consultations,
agree on measures to prevent those impacts.
Instead, several pages after stating that FWS uses a
“but for” test, the Opinion applies a very different causa-
tion rationale to avoid addressing those impacts, asserting
that the “action, as proposed is not likely to jeopardize”
affected species because the “loss of any conservation
benefit is not caused by EPA’s decision to approve the
State of Arizona’s program,” but, rather, by “Congress’
decision” in 1972 to enact section 402(b) of the CWA.
NAHB App. 114, 116. Nonetheless, EPA’s final decision
“approv[ing] the application” again advised the public that
EPA had completed the “consultation process required by
ESA section 7(a)(2)” and that its “approval of the State
program meets the substantive requirements of the ESA.”
NAHB App. 73 (emphasis added).
E. Proceedings Below
Because EPA conceded that it was required to comply
with section 7(a)(2), respondents brought a straightfor-
ward “arbitrary and capricious” challenge to the adequacy
and logical consistency of the Biological Opinion and EPA’s
reliance on that document. Respondents argued that, as in
past consultations on transfer applications, the Opinion
should at least address how endangered species will in fact
be affected by the transfer and, if jeopardy or critical habitat
destruction will result, either fashion a “reasonable and
Bus
19
prudent alternative” or refer EPA and Arizona to the
Congressionally-mandated exemption process. While
defending its decision, EPA repeatedly advised the court of
appeals that it was not arguing that NPDES transfer
decisions are non-discretionary actions, or that such
decisions may avoid section 7(a)(2) compliance for any
other reason.*
In ruling that EPA’s reliance on the Biological Opinion
was arbitrary and capricious, the court of appeals rea-
soned that the section 7(4)(2) obligation to avoid jeopardy
is coterminous with the duty to consult — i.e., both are
triggered by “any action authorized, funded, or carried out
by such agency” — and
this being the case, the two propositions that un-
derlie 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 im-
pact on listed species in making the transfer de-
cision — cannot both be true. Because the
agency's decisionmaking was based on contradic-
tory views of the same words in the same statu-
tory provision, the ultimate decision was not the
result of reasoned decisionmaking.
NAHB App. 26-27. While it was Unnecessary for the court
of appeals to go beyond this rationale for remanding to
EPA, the court also explained that EPA’s position that it
* See EPA’s Court of Appeals’ Answering Brief, at 31 n.9; see also
J.A. 321-22, 325. Because EPA had recognized that it was required to
comply with section 7(a)(2) and respondents’ sole concern was with the
adequacy of that compliance, respondents, while never conceding that
the CWA transfer criteria were satisfied, did not base their challenge on
them.
20
was under no obligation to address the actual effects of its
transfer decision was contrary to the language of section
7(aX(2), that provision’s legislative history and patent
purpose, and Hill. The court, however, did not hold that
EPA could not approve the transfer but, rather, remanded
the matter for a “more careful consideration of the actual
protection” that would »e afforded by other federal and
state measures following transfer. Jd. at 61.
°
SUMMARY OF ARGUMENT
1. EPA now agrees that the court of appeals correctly
ruled that EPA’s approach to section 7(a)(2) reflected an
internally inconsistent interpretation of the meaning and
function of the provision. Therefore, in accordance with
established principles of administrative law, the case
should be remanded to EPA for further proceedings,
notwithstanding EPA’s extra-record post hoc effort to
“clarif[y]” its position for the first time in this Court. EPA
Br. at 49.
2. Should the Court nevertheless address whether
section 7(a)(2) applies in this context, petitioners’ position
that section 7(a)(2) has no bearing on NPDES transfer
decisions contradicts the plain language of the ESA, which
provides that EPA must “insure that any action authorized,
funded, or carried out” by EPA is “not likely to jeopardize
the continued existence of species or result in the destruc-
tion or adverse modification” of critical habitat. 16 U.S.C.
§ 1536(a)(2) (emphasis added). In Hill, this Court ruled that
“loJne would be hard pressed to find a statutory provision
whose terms were any plainer.” 437 U.S. at 173. Those
“terms” apply squarely to EPA’s “final action authorizing
21
Arizona to implement the NPDES program,” 67 Fed. Reg.
79,631, as well as to EPA’s expenditure of federal funds on
the program. Petitioners’ position also flies in the face of
Congress’s response to Hill, which ratified this Court’s
plain language reading while also creating an exemption
process for the specific purpose of resolving any intractable
conflicts between section 7(a)(2) and agency actions under
other statutes. Thus, in sharp contrast to the National
Environmental Policy Act, 42 U.S.C. §4321 et seq.
(“NEPA”) — which imposes “only procedural requirements
on federal agencies,” Department of Transportation v.
Public Citizen, 541 U.S. 752, 756-57 (2004) — section 7
contains a “flat ban” on agency actions likely to result in
jeopardy to listed species or the “destruction of critical
habitats,” Weinberger v. Romero-Barcelo, 456 U.S. 305,
313-14 (1982), and also sets forth a Congressionally-
mandated process for resolving any conflicts between that
“ban” and agency actions under other statutes.
3. Petitioners’ arguments are predicated on the
demonstrably erroneous premise that it is impossible for
EPA to comply with both section 7(a)(2) and section
402(b)(1) of the CWA, and hence that the agencies (and the
Court) must, in effect, choose sides in a battle of statutory
commands. However, as EPA and FWS have announced to
the public, the “CWA and ESA jare] compatible and com-
plementary” statutes that “contain powerful tools that,
when integrated effectively, will advance the objectives of
both Acts.” NAHB App. 267, 274. Accordingly, as demon-
strated by EPA’s and FWS’s past successful efforts at
compliance with both laws — in which State applications
were approved and sensible steps were taken to safeguard
federally protected species — the federal agencies’ real-world
22
experience belies any need to read these statues as being
in unavoidable conflict.
4. On close inspection, petitioners are actually
asking the Court to create a gaping loophole in section
7(a)(2) that bears no relationship to the words or extinc-
tion prevention purpose of the provision. Thus, if the
Court were to rule that section 7(a)(2) does not apply
simply because Congress established criteria for EPA to
apply in making transfer decisions (criteria that in fact
encompass a consideration of wildlife concerns) section
7(a)(2) will be gutted, because Congress generally legis-
lates by delineating the factors that agencies consider in
making decisions. But as Hill makes crystal-clear, section
7(a(2) was enacted so that agencies would also be re-
quired to address endangered species impacts before
taking action. If petitioners believe that is bad public
policy, their proper recourse is with Congress, rather than
asking this Court to rewrite section 7(a)(2).
®
ARGUMENT
I. THE COURT OF APPEALS CORRECTLY HELD
THAT EPA’S DECISION WAS ARBITRARY AND
CAPRICIOUS AND THE CASE SHOULD BE
REMANDED ON THAT BASIS
A. EPA Now Concedes That Its Approach To
Section 7(a)(2) Was Internally Inconsistent
And Confusing
EPA now agrees that the court of appeals was “cor-
rect” in ruling that EPA’s decision was based on inconsis-
tent interpretations of section 7(a)(2):
23
[T]he court of appeals was correct in stating that
the no-jeopardy and consultation requirements of
Section 7(a)(2) go hand in hand, 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 re-
flected a degree of confusion regarding the ESA’s
application to the NPDES transfer decision.
EPA Br. at 42 (emphasis added). Evidently, therefore, the
government concurs with the court below that EPA’s
decision reflects an arbitrary, if not “nonsensical,” view
that EPA “had to consult but had no authority to do
anything concerning the matter about which it had to
consult.” NAHB App. 25-26. Indeed, EPA goes so far as to
characterize its own decision documents as being based on
a “misstatement of law,” EPA Br. at 45, a “misperception”
and “erroneous view” of the meaning of section 7(a)(2), id.
at 46, and a “failure ... to appreciate the full logical
implications” of the agency’s position before the court
below. Id. at 47.
Ordinarily, such concessions of legal “confusion” and
internal inconsistency should result in the case being
remanded to the agency for “reasoned decisionmaking.”
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 52, 56-57 (1983) (“State Farm”). As the
Court has explained:
liJf the record before the agency does not support
the agency action, if the agency has not consid-
ered all relevant factors, or if the reviewing court
simply cannot evaluate the challenged action on
the basis of the record before it, the proper course,
except in rare circumstances, is to remand to the
24
agency for additional investigation or explana-
tion.
Florida Power & Light Corp. v. Lorion, 470 U.S. 729, 744
(1985) (emphasis added); see also SEC v. Chenery, 332 U.S.
194, 196-97 (1947) (“If the administrative action is to be
tested by the basis on which it purports to rest, that basis
must be set forth with such clarity as to be understand-
able.”).’
B. EPA Cannot Avoid A Remand Based On Its
Extra-Record Post Hoc Explanation
Here, petitioners present “no special circumstances,”
Gonzales v. Thomas, 547 U.S. 183, 126 S. Ct. 1613, 1615
(2006), that justify deviating from what the government
acknowledges are “established principles” of administra-
tive law. EPA Br. at 48 n.17. To the contrary, EPA seeks to
sidestep these principles by resorting to the kinds of “ ‘post
* As noted earlier, the record reflects not only a now-conceded
incongruity in EPA’s view on the applicability of section 7(a)(2) as a
whole, but also a related inconsistency in the Biological Opinion
concerning how the “effects” of an action should be analyzed once
section 7(a\(2) is triggered. The Opinion says that FWS uses a “but for”
test in assessing such effects, NAHB App. 112, and that statement is
consistent with other explanations of the Service’s longstanding
approach. See 51 Fed. Reg. 19,926, 19,932 (June 3, 1986) (preamble to
ESA regulations). But the Opinion then applies a different “lega/ cause”
analysis, EPA Br. at 25 (emphasis added), to avoid evaluating all of the
actual impacts on endangered species. This discordance affords an
additional basis on which the case should be remanded on arbitrary and
capricious grounds. See, eg., New England Coalition on Nuclear
Pollution v. NRC, 727 F.2d 1127, 1130 (D.C. Cir. 1984) (Scalia, J.)
(where an agency may choose between two approaches to a problem, the
agency cannot say it is “adoptling) one and [then] apply the other. To do
so is the essence of arbitrary and capricious action.”) (internal quotation
omitted).
25
hoc rationalizations’” the Court has long held “to be an
inadequate basis for review” of agency action. Citizens to
_ Preserve Qverton Park v. Volpe, 401 U.S. 402, 419-20
(1971) (quoting Burlington Truck Lines v. U.S., 371 U.S.
156, 168-69 (1962)).
EPA contends that the Court need not remand be-
cause the “federal agencies have since” — i.e., “since” the
agency decision under review was made — “clarified their
understanding of the legal principles that govern in this
setting.” EPA Br. at 42. This “clarification” - which is
actually a reversal of the agencies’ prior policy — is that
section 7(a)(2) compliance is “not required in this context.”
Id. at 49. The government acknowledges that this newly-
minted argument conflicts with EPA’s declarations in
connection with past NPDES transfer decisions that
section 7(a)(2) compliance is mandatory, as well as with
EPA's published positions “|a]t both the beginning and the
end of the consideration of Arizona’s transfer application.”
Id. at 6, 44. Nonetheless, EPA maintains that because it
has now provided this Court with the “very clarification
that might have occurred if the court of appeals had...
remanded for further administrative proceedings,” the
Court should decide the case based on EPA’s new “under-
standing” of its statutory duties. Jd. at 49 (emphasis
added).
The Court should decline this invitation to dispense
with fundamental principles of administrative law and
appellate review. EPA’s purported “clarification” took place
not only long after EPA decided to transfer authority to
Arizona, but many months after the court of appeals
issued its ruling based on the administrative record.
Indeed, the agency’s revised position — as embodied in an
October 2006 unpublished “exchange of letters,” EPA Br.
26
at 37-38 — was hastily developed during the time that EPA
was asking this Court for extensions of time to file its
petition for certiorari. See EPA’s 9/26/06 Application for a
Further Extension of Time, at 5. Plainly, having lost below
— including on the now-conceded ground that its approach
to section 7(a)(2) was internally inconsistent — EPA set out
to manufacture a new “clarified” position that the agency
now seeks to substitute in this Court for the admittedly
“confus[ing]” rationale invoked in the administrative
proceeding and presented to the court of appeals. EPA Br.
at 42.
There are good reasons, however, why this Court has
ruled that such post hoc explanations “cannot serve as a
sufficient predicate for agency action.” American Textile
Mfrs. Inst., Inc. v. Donovan, 452 U.S. 490, 539 (1981). They
are
incompatible with the orderly functioning of the
process of judicial review. This is not to depre-
cate, but to vindicate the administrative process,
for the purpose of the rule is to avoid ‘propel(ling)
the court into the domain which Congress has set
aside exclusively for the administrative agency.’
Burlington Truck Lines, 371 U.S. at 168, 169 (internal
citation omitted).
This interest in protecting the “orderly functioning of
the process of judicial review,” id., is at its zenith in this
case because the letters on which EPA is now relying were
not available to either the court of appeals or the parties
in the court below. In other words, EPA has compounded
its administrative law violation by also disregarding this
Court’s directive that the Court ordinarily refrains from
even considering facts and materials that are “not part of
27
the record” compiled in the court below “[bjecause this
Court must affirm or reverse upon the case as it appears
in the record... .” Witters v. Washington Dep't of Services
for the Blind, 474 U.S. 481, 488 n.5 (1986); see also Wygant
v. Jackson Board of Education, 476 U.S. 267, 278 n.5
(1986).”°
C. EPA’s “Harmless Error” Argument Is Base-
less
1. EPA also argues that a remand is unnecessary
because “‘{i]Jn administrative law ... there is a harmless
* EPA's reliance on Auer v. Robbins, 519 U.S. 452, 461 (1997), for
the novel proposition that the Court should not only consider but
“defer” to the agency's post hoc explanation, EPA Br. at 38, is misplaced.
In Auer, the Court did not consider a challenge to an agency action but,
rather, resolved litigation between two private parties that turned in
part on the meaning of a regulation previously issued by the Depart-
ment of Labor. Accordingly, the Court requested the Secretary of Labor
to file an amicus brief explaining how the agency’s regulations applied
to the case. Auer, 519 U.S. at 461. In relying on the interpretation it
had requested, the Court explained that, under the “circumstances of
this case,” the “Secretary's position is in no sense a ‘post hoc rationaliza-
tio[n]’ advanced by an agency seeking to defend past agency action
against attack.” Id. at 462 (internal quotation omitted; emphasis
added). Here, in contrast, the rapid-fire “exchange of letters” that was
evidently engineered for the purpose of bolstering EPA’s position in this
Court constitutes the quintessential post hoc effort to “defend past
agency action against attack.” See EPA App. 93a-110a (indicating that
EPA sent letters on October 13, 2006, and received nearly identical
responses from FWS and the National Marine Fisheries Service four
and five days later, and that these responses were received less than
one week before EPA filed its petition for certiorari). In this connection,
it is also noteworthy that the Alaska application the letters purport to
address has not even been noticed for public comment in the Federal
Register because the application was deemed seriously deficient by EPA
on various grounds. See http://www.dec.state.ak.us/water/npdes/pdfs/
WG_mtg_13_Handout_5.pdf.
28
error rule,” EPA Br. at 45 (quoting PDK Labs., Inc. v.
United States DEA, 362 F.3d 786, 799 (D.C. Cir. 2004)),
and “[rjespondents [] were not prejudiced by EPA’s errone-
ous view that the consultation was required by Section
7(aX2).” EPA Br. at 46. Petitioners made no such “harm-
less error” argument in the court of appeals, and hence it
should be deemed waived. See, e.g., Hormel v. Helvering, 312
U.S. 522, 556 (1941). But even if the Court entertains this
new argument, respondents have in fact been severely
“prejudiced” by EPA’s shifting, inconsistent positions on its
section 7(a)(2) responsibilities, as well as by its belated
attempt to clarify its position for the first time in this Court.
In addition to the patent unfairness of putting re-
spondents in the position of having tu address in this
Court a “clarified” explanation that was not raised in
either the administrative process or the court below, EPA
is effectively nullifying respondents’ rights to participate
in administrative proceedings concerning Arizona’s appli-
cation, and particularly respondents’ rights under EPA’s
own regulations to comment on NPDES transfer applica-
tions. See 40 C.F.R. § 123.61(b). Because EPA, both in past
published pronouncements and in soliciting comments on
Arizona’s transfer application, declared that EPA is re-
quired to comply with section 7(a)(2), EPA Br. at 44, under
established administrative law principles the agency's
revised understanding of its legal obligations should at
least be exposed to public comment before being adopted
and subjected to judicial review. See, e.g., Alaska Profes-
sional Hunters Ass’n v. FAA, 177 F.3d 1030, 1034 (D.C. Cir.
1999) (“Once an agency gives its regulations an interpreta-
tion, it can only change that interpretation as it would
formally modify the regulation itself: through the process
29
of notice and comment rulemaking.”) (internal quotation
omitted).
2. Moreover, this is hardly a case in which further
agency proceedings — including EPA entertaining public
comment on its modified position — would be a pointless
exercise. Rather, as might be expected from a hurried,
litigation-driven “clarification,” the “exchange of letters”
avoids important issues that could - and should — be
addressed by EPA in the first instance through remanded
administrative proceedings. The agency’s consideration of
these issues may persuade it to adopt a different approach
and would at least result in a more complete record for
judicial review.
For example, as noted, EPA not only “authori[zed]”
and “approved” Arizona’s application, NAHB App. 69, 76,
but, at Arizona’s request, EPA also committed substantial
federal funds to the Arizona NPDES program. See J.A. 53
(“EPA has committed to funding [the Arizona program] for
the next three years”). While FWS maintained that EPA’s
funding of the State program was an independent basis for
triggering section 7(a)(2) duties, see 16 U.S.C. § 1536(a)(2),
this issue was largely of academic significance in view of
EPA's concession that consultation was required by au-
thorization alone. See J.A. 44 (EPA disagreed that it must
consult on “funding” of Arizona’s program but conceded an
obligation to consult on “delegation of the program”).
However, in view of the agencies’ “clarified” position
that EPA’s “authorization” was insufficient to require
compliance with section 7(a)(2), EPA’s funding of Arizona’s
program becomes a far more crucial consideration, because
section 7(a)(2) applies to “any action ... funded” by a -
federal agency. 16 U.S.C. § 1536(a)(2). At the very least,
30
given EPA's belated reversal of its longstanding position
that program authorization alone is an adequate basis for
section 7(a)(2) compliance, a remand should at least
address whether, in the agencies’ view, authorization along
with federal funding is sufficient to trigger full section
7(a)(2) compliance.
3. Another issue that respondents (if afforded the
opportunity) would urge EPA to address on remand is how
EPA reconciles its revised position regarding section
7(a)(2) with the manner in which the agency has dealt
with other overarching legal obligations imposed on
federal agencies but not enumerated in the transfer
provision. Thus, EPA’s post hoc position is that section
7(a(2) should be ignored because “[njone of the nine
criteria contemplate or provide for consideration of poten-
tial effects to listed species [or] critical habitat.” EPA App.
97a. In reality, as previously explained, the CWA criteria
do “provide for consideration” of wildlife impacts and,
indeed, the Biological Opinion recognizes that the CWA’s
“specific references to protecting ‘fish,’ ‘shellfish,’ ‘wildlife,’
and ‘aquatic life’. . . clearly encompass federally listed and
proposed species.” NAHB App. 84.
Even aside from this conflict between EPA’s post hoc
position and the Biological Opinion actually before the
Court, EPA’s new explanation raises the important ques-
tion of whether the agency is acting consistently with
other statutory and legal obligations with far less of a
relationship to the transfer criteria than federally pro-
tected wildlife. See Natl Cable and Telecomm. Ass’n v.
Brand X Internet Services, 545 U.S. 967, 981 (2005)
(agency’s “[uJnexplained inconsistency” may afford a basis
for “holding an interpretation to be an arbitrary and
capricious change from agency practice”). For example,
31
when announcing its decision on the Arizona application,
EPA explained that the National Historic Preservation
Act, 16 U.S.C: § 470(f) (*“NHPA”), “requires Federal agen-
cies to take into account the effects of their undertakings
on historic properties.” NAHB App. 73. Although such
“effects” are not mentioned in the CWA transfer criteria,
EPA explained that it had complied with the “coordination
process” required by the NHPA. 7d. at 74. Similarly, in
responding to comments submitted by the Inter-Tribal
Council of Arizona, EPA stated that, “consistent with the
federal trust responsibility” towards Native-American
tribes, EPA would take steps, post-transfer, to address
“matters that arise under the [Arizona] program which
may affect Tribes, including issues related to permits that
may have a potential adverse effect on tribal historic
properties.” J.A. 203. EPA did not suggest that it could
disregard the “trust responsibility” towards Native-
Americans because it is not enumerated in the CWA.
As now “clarified” therefore, EPA’s anomalous position
appears to be that section 7(a)(2) is the only legal obliga-
tion imposed on the federal government that EPA should
ignore in making NPDES transfer decisions — although
Congress intended to “afford{] endangered species the
highest of priorities. .. .” Hill, 437 U.S. at 194. At the very
least, respondents are indeed “prejudiced by the absence of
an opportunity” even to raise in remanded administrative
proceedings these and other significant issues implicated
by EPA’s conceded confusion concerning section 7(a)(2) and
the agency’s extra-record effort to cure that problem in
this Court. Gerber v. Norton, 294 F.3d 173, 184 (D.C. Cir.
2002).
In sum, because EPA’s decision was based on inconsis-
tent views of section 7(a)(2), the case should hive been
32
remanded for further administrative proceedings, and it
was unnecessary for the court below to address the
broader statutory construction issue. See, e.g., Air Courier
Conference of Am. v. Am. Postal Workers Union, 498 U.S.
517, 531-32 (1991) (Stevens, J., concurring) (“Faithful
adherence to the doctrine of judicial restraint provides a
fully adequate justification for deciding this case on the
best and narrowest ground available.”); PDK Labs. 362
F.3d at 799 (Roberts, J., concurring in the judgment)
(applying the “cardinal principle of judicial restraint” that
“if it is not necessary to decide more, it is necessary not to
decide more”).
Il. IN MAKING TRANSFER DECISIONS, EPA MUST
COMPLY WITH SECTION 7(a)(2)
Because EPA now concedes that the court of appeals
was correct in ruling that the consultation and substantive
requirements of section 7(a)(2) “go hand in hand,” EPA Br.
at 42, respondents and EPA agree that EPA must either
comply with that provision in its entirety or not at all. See
id. EPA’s “clarified” answer is not at all. As the agency
recognizes, the “logical” implication of its argument is that
a transfer to a State could be certain to lead to extinction
of one or more federally protected species, and yet neither
the procedural nor substantive safeguards of section
7(a)(2) would ever come into play. EPA Br. at 14, 42, 47.
Here, for example, although the transfer could, without
further safeguards, prove “devastating” to survival of the
few remaining Southwestern willow flycatchers, J.A. 39, or
lead to the “severe decline” of endangered plants, id. at 49,
petitioners’ position is that the agencies need not consult
about such dire impacts or do anything to prevent them
even if simple solutions are at hand.
33
This is not a “logical” or even a plausible reading of
section 7(a)(2). EPA Br. at 47. To the contrary, adopting
petitioners’ approach would require the Court to engage in
“interpretive acrobatics,” Reno v. American-Arab Anti-
Discrimination Committee, 525 U.S. 471, 482 (1999), and
cast aside both plain statutory language and the “institu-
tionalized caution” that Congress intended when federal
agencies take actions that affect listed species. Hill, 437
U.S. at 194.
A. Compliance With Section 7(a)(2) Is Required
By The Plain Language Of Section 7(a)(2),
This Court’s Ruling In Hill, And Congress’s
Subsequent Ratification Of That Ruling
In view of the “text anid structure” of section 7, Gonza-
les v. Oregon, 546 U.S. 243, 126 S. Ct. 904, 910 (2006),
Hill’s reading of that provision, and Congress’s subsequent
creation of the Endangered Species Committee to address
conflicts, petitioners’ contention that the ESA has no
bearing on NPDES transfer decisions is simply unten-
able."
" Since “traditional tools of statutory construction” establish that
EPA must comply with section 7(a)(2), there is no need for the Court to
determine whether the unusual circumstances of this case warrant any
deference to the agencies’ inconsistent approach to the provision.
Chevron, U.S.A. v. Natural Resources Defense Council, 467 U.S. 837,
843 n.9 (1984). In any event, even if it were appropriate to consider the
extra-record letters, those documents would be entitled to little if any
deference. See United States v. Mead Corp., 533 U.S. 218, 228 (2001)
(amount of deference based_on “the degree of the agency’s care, its
consistency, formality,” and related factors); Christensen v. Harris
County, 529 U.S. 576, 587 (2000) (denying Chevron deference to agency
opinion letter).
34
1. Plain Language Of Section 7(a)(2)
While EPA asserts that section 7(a)(2) does not “un-
ambiguously” apply, EPA Br. at 20, petitioners largely
ignore the provision’s plain language, which fits this case
perfectly. Section 7(a)(2) provides, in pertinent part, 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 [| is not likely to jeopardize the
continued existence of any endangered species or
threatened species or result in the destruction or
adverse modification of [critical] habitat of such
species. ...
16 U.S.C. § 1536(a)(2) (emphasis added).
EPA is a “federal agency” and its self-described deci-
sion “authorizing Arizona to implement the NPDES
program” surely falls within the “any action authorized .. .
by such agency” language. See Dep't of Hous. and Urban
Dev. v. Rucker, 535 U.S. 125, 131 (2002) (“the word ‘any’
has an expansive meaning, that is, ‘one or some indis-
criminately of whatever kind’”) (internal citation omitted);
Webster’s New World Dictionary (1990) (“authorize”
means “to give official approval to” and “to give power or
authority to”); see also Bennett, 520 U.S. at 164-65 (phrase
“any person may commence a civil suit” in the ESA’s
citizen suit provision is “an authorization of remarkable
breadth” that should be taken “at face value”).
_Accordingly, if section 7(a)(2) is interpreted in accor-
dance with its ordinary meaning, the provision “requires
federal agencies to ensure that none of their activities ...
will jeopardize the continued existence of endangered
species ‘or result in the destruction or modification” of
35
critical habitat. Sweet Home, 515 U.S. at 692 (emphasis
added; internal citation omitted). In addition, because the
Arizona program is receiving substantial federal funds
and, indeed, the transfer would likely not have even
occurred in the absence of such funding, see J.A. 200-01,
the plain terms of section 7(a)(2) apply for that reason as
well. See also 50 C.F.R. § 402.02 (defining “[a]ction” for
purposes of section 7 as “all activities or programs of any
kind authorized, funded, or carried out, in whole or in
part, by Federal agencies”) (emphasis added).”
2. Statutory Context
The “specific context in which that language [of
section 7(a)(2)] is used,” Robinson v. Shell Oil Co., 519 U.S.
337, 341 (1997), makes even clearer that section 7(a)(2)
means what it says, because another subsection contains
the very limitation petitioners are asking this Court to
read into section 7(a)(2). Thus, section 7(a)(1) of the
statute separately provides that
federal agencies shall, in consultation with and
with the assistance of the Secretary, utilize their
authorities in furtherance of the purposes of this
° That petitioners’ position distorts the statutory language is also
illustrated by EPA’s assertion that, “by its own terms, Section 7(aX2)
directs agencies to ‘insure’ only that their own actions are not likely to
be the cause of jeopardy.” EPA Br. at 27 n.8 (emphasis in original). That
approach reads federally “authorized” and “funded” activities out of the
provision, and also overlooks the fact that section 7 expressly refers to
federa] actions involving a “permit or license applicant.” 16 U.S.C.
§ 1536(b\ 1)(B); see also NAHB App. 75 (explaining that EPA has “long
considered a determination to approve or deny a State” NPDES
transfer request to be a “license” decision that is the product of an
“adjudication”).
36
chapter by carrying out programs for the conser-
vation of endangered species and threatened spe-
cies.
16 U.S.C. § 1536(a)(1) (emphasis added).
Hence, section 7(a)(1) imposes an affirmative obliga-
tion on federal agencies to implement “programs for the
conservation” — i.e., recovery, see 16 U.S.C. § 1532(3) — of
listed species, but that obligation is expressly limited to
agencies’ use of their own “authorities.” In contrast, the
section 7(a)(2) prohibitions on jeopardy and critical habitat
destruction apply to “any ... action authorized, funded, or
carried out” by an agency. In other words, section 7(a)(1)
creates a more far-reaching “conservation” duty but does
so with regard to a narrower range of agency conduct.
When these subsections are viewed together, petition-
ers’ contention that section 7(a)(2) is implicated only by
“federal agencies’ exercise of existing discretionary author-
ity,” EPA Br. at 15, runs roughshod over well-entrenched
rules of statutory construction. First, “‘[w]here Congress
includes particular language in one section of a statute but
omits it in another section of the same Act, it is generally
presumed that Congress acts intentionally and purposely
in the disparate inclusion or exclusion.” Russello v. United
States, 464 U.S. 16, 23 (1983) (internal citation omitted)
(affording statutory phrase its broad plain language
meaning because a “succeeding subsection” had the same
limitation the Court was being asked to read into the
provision at issue; “[hlad Congress intended to restrict”
the provision in the same manner, it “presumably would
have done so expressly as it did in the immediately follow-
ing subsection”). Therefore, the short answer to petition-
ers’ overarching contention that section 7(a)(2) should, in
effect, be judicially rewritten to say that agencies need
37
only “utilize their authorities” to avoid jeopardy or critical
habitat destruction, see EPA Br. at 15, is that Congress
knew how to, but simply “did not write the statute that
way.” Russello, 464 U.S. at 23.”
’ By arguing that the prohibitions in section 7(a)(2)
apply only to an agency’s use of its “existing authority,”
EPA Br. at 15, rather than “any [agency] action author-
ized, funded, or carried out,” as Congress mandated,
petitioners’ approach also contravenes the “ ‘cardinal
principle of statutory construction ... [that] [i]t is [the
Court’s] duty to give effect, if possible, to every clause and
word of a statute... .’” Bennett, 520 U.S. at 173 (internal
citation omitted). This is because the section 7(a)(1) duty
to “conserve” listed species necessarily subsumes the
substantive prohibitions embodied in section 7(a)(2), i.e.,
an agency cannot “conserve” a listed species while also
causing its extinction. See Sierra Club v. U.S. Fish and
Wildlife Service, 245 F.3d 434, 441-42 (5th Cir. 2001)
” Petitioners assert that legislative history counsels in favor of
inserting into section 7(a)(2) the “utilize their authorities” limitation
that Congress omitted. EPA Br. at 15. Even if the Court were free to
“read|] words or elements into [section 7(a\2)] that do not appear on its
face,” Bates v. United States, 522 U.S. 23, 29 (1997), the legislative
history actually reflects, as the decision below explains, that the broad
scope of the jeopardy prohibition “was, as one would expect, deliberate.”
NAHB App. 34. Thus, Congress specifically intended to impose a
“further require|ment]” on agency “action[s]” that goes beyond agencies’
duty to “use their authorities in order to carry out programs” for the
recovery of endangered species. 1973 House Report, ESA Leg. Hist. at
153 (emphasis added); see also 51 Fed. Reg. 19,926, 19,934 (FWS
explanation that section 7(a)(1) “authorize[s] Federal agencies to factor
endangered species conservation into their planning processes,” and
that “liJn contrast, section 7(aX2) contains the mandatory ‘jeopardy’
standard” and the “ultimate barrier past which Federal actions may not
proceed” without an exemption from the Endangered Species Commit-
tee) (emphasis added).
38
(“‘{clonservation’ is a much broader concept than mere
survival”), As a consequence, unless section 7(a)(2) is read
to apply to “any [federal] action authorized, funded, or
carried out” — as Congress said — the provision is mere
“surplusage.” Sweet Home, 515 U.S. at 698 (“unless the
statutory term ‘harm’ [in the ESA] encompasses indirect
as well as direct injuries, the word has no meaning that
does not duplicate the meaning of other words that § 3
uses to define ‘take’ ”).
3. TVA v. Hill
While petitioners-assert that Hill “had no occasion to
address the question presented here,” EPA Br. at 16, the
federal agency in Hill advanced essentially the same
arguments being made by EPA, albeit in a different factual
context, and the Court’s reasons for rejecting those argu-
ments apply with full force here.
In Hill, the agency argued that the section 7 jeopardy
prohibition did not apply to a dam that had already cost
“more than $ 100 million dollars” in public funds, was
“near completion” when the ESA was enacted, 437 U.S. at
172, 174, 184, and for which Congress had intentionally
“continued appropriations ... with full awareness of the
[endangered species] problem” posed by the action. /d. at
166. Indeed, Congress had specifically appropriated funds
“for completion” of the dam and “relocation of the snail
darter,” the endangered species at issue. Jd. at 171.
In that factual context, TVA argued that the phrase
“actions authorized, funded, or carried out” should not be
afforded its plain meaning but, rather, should be limited tc
only those actions “with respect to which the agency has
reasonable decision-making alternatives before it.” Pet. Br
39
at 26, Tennessee Valley Authority v. Hill, No. 76-1701 (filed
Jan. 26, 1978) (“TVA Br.”) (emphasis added); see also id.
(“the ‘actions’ referred to are not all the actions that an
agency can ever take, but rather actions that the agency is
deciding whether to authorize, to fund, or to carry out”)
(emphasis added). Therefore, TVA urged the Court to
reject an “over-literal construction” of section 7. Id. at 29,
39."
While the dissent endorsed the view that the jeopardy
prohibition should apply only to actions an “agency is
deciding whether te authorize, to fund, or to carry out,” 437
U.S. at 205 (Powell, J.) (emphasis in original), Chief Justice
Burger’s majority opinion held that this reading of the
statute was contrary to the “ordinary meaning of [the]
plain language,” which the Court construed as “com-
mand{[ing] federal agencies” not to take actions that in fact
result in jeopardy to species or destruction of critical
habitat. Jd. at 173; see also id. at 188 (“[i]n fact, there are
no exemptions in the |jeopardy prohibition] for federal
agencies”). The Court also found this “ordinary meaning”
consistent with the legislative history, particularly the fact
“ EPA's asserted distinction between this case and Hill — that Hill
dealt with “agency policy judgments concerning the appropriate
exercise of discretionary authority,” EPA Br. at 16 (emphasis in original)
— misstates botn cases. In making NPDES transfer decisions, EPA has
“discretionary authority” under the CWA, particularly with regard to
wildlife-related impacts. See supra at 8-9. Moreover, the government's
position in Hi'l was that TVA did not have “decision-making alterna-
tives” because of Congress’s “determination that this project should be
completed” and the dam was nearly complete. TVA Br. at 29, 36. In that
connection, any notion that TVA had some inherent “discretion” to
refuse to spend funds that Congress had appropriated for completion of
the dam is mistaken. See Train v. New York City, 420 U.S. 35, 43-45
(1975) (federal agencies lack discretion to avoid spending appropriated
funds on policy grounds).
40
that the bills crafted by Congress were designed to both
“prohibit [a] federal agency from taking action which does
jeopardize the status of endangered species” and “fur-
thermore,” to direct each agency to “utilize [its] authorities
for carrying out programs” for the conservation of listed
species. Hill, 437 U.S. at 179-80 (emphasis in original;
internal quotation omitted). Accordingly, the Court’s ruling
confirms that it has been clear from the beginning of the
Act that the jeopardy prohibition applies, as the plain
language provides, to all “action[s]” authorized, funded, or
carried out by an agency and not simply to agencies’
decisions on how to use their own “authorities.”
Indeed, the Court further explained that the ESA’s
predecessor statutes “qualified the obligation of federal
agencies by stating that they should seek to preserve
endangered species only ‘insofar as is practicable and
consistent with thelir] primary purposes,” Hill, 437 U.S.
at 181 (internal citation omitted), and that it was “very
significant” that, as enacted, the ESA “carefully omitted
all of the[se] reservations” and deleted “all phrases which
might have qualified an agency’s responsibilities” to avoid
actions that result in extinction. Jd. at 182. Accordingly,
the Court ruled that Congress’s decision to adopt “strin-
gent, mandatory” language, id. at 183, reflected “an
explicit congressional design to require agencies to afford
first priority to the declared national policy of saving
endangered species,” and that the “pointed omission of the
type of qualifying language previously included in endan-
gered species legislation reveals a conscious decision by
Congress to give endangered species priority over the
‘primary missions’ of federal agencies.” Id. at 185 (empha-
sis added). Hill, therefore, clearly stands for the proposi-
tion that agencies cannot escape the section 7(a\2
41
prohibitions merely by arguing that Congress assigned
them conflicting responsibilities. See also id. at 184
(“‘(T]he agencies of Government can no longer plead that
they can do nothing about it. They can, and they must. The
law is clear.’”) (emphasis in original) (quoting 119 Cong.
Rec. 42913 (1973) (Rep. Dingell)).
4. Congress’s Ratification Of Hill And Crea-
tion Of The Endangered Species Commit-
tee To Resolve Conflicts Between Section
7(a)(2) And Other Statutory Duties
In the 1978 amendments, Congress took two steps
that are also fatal to petitioners’ position. First, Congress
ratified Hill’s plain language ruling regarding the scope of
the section 7 prohibition on jeopardy and destruction of
critical habitat. Second, Congress created the Endangered
Species Committee for the precise purpose of resolving the
kind of conflict that petitioners (erroneously) insist exists
between section 7(a)(2) and the CWA transfer provision. -
As explained in the 1978 House Report, Congress
understood the ruling in Hill as “indicatling] that the
pointed omission of any type of qualifying language in
[section 7 of] the statute revealed congressional intent to
give the continued existence of endangered species priority
over the primary missions of Federal agencies.” 1978
House Report, ESA Leg. Hist. at 734. The Report further
explained that Congress accepted this construction of
section 7 as “requirfing] all federal agencies to consult
with the Department of the Interior ... when any of their
actions may affect endangered species,” and that “whether
a particular activity violates Section 7 depends on the type
and degree of impact that the activity will have on the species
or its habitat.” Jd. at 735 (emphasis added). Accordingly,
42 ———_
rather than respond to Hill by qualifying the jeopardy
prohibition with the kind of limiting language in section
7(a)(1), Congress reenacted the prohibition without any
such restriction. See Pub. L. 95-632, 92 Stat. 3753, ESA
Leg. Hist. at 648.
Instead, to “introduce some flexibility into the Act,”
Congress enacted “a procedure through which Federal
agencies may be considered for an exemption from the Act’s
mandate that they not jeopardize the continued existence”
of listed species. 1978 House Report, ESA Leg. Hist. at 727
(emphasis added). Accordingly, the “basic premise” of
Congress’s response to Hill was that “the integrity of the
interagency consultation process designated under section
7 of the Act be preserved,” and that only “in those in-
stances where the consultation process has been ex-
hausted and a conflict still exists,” the Endangered Species
Committee shall consider granting an exemption for a
federal action. 1982 Senate Report, NAHB App. 532
(emphasis added).
Contrary to petitioners’ assertion that the exemption
process is somehow foreclosed when there are “legal
constraints on agency power to protect species,” EPA Br. at
29, Congress specifically anticipated that the Committee
would address conflicts between section 7(a)(2) and the
agency’s “jurisdiction” to protect species under its own
authorities. See 1978 House Report, ESA Leg. Hist. at 746
(the Committee “should focus on a wider variety of alter-
natives [than the consultation process]. Their search
should not be limited to original project alternatives or the
acting agency’s jurisdiction.”) (emphasis added). Further
in granting an exemption, the Committee — which, once
again, is composed of high-ranking federal officials as wel
as a representative of each “affected State” — is authorizec
43
to establish such “mitigation and enhancement measures
. aS are necessary and appropriate to minimize the
adverse effects of the agency action” on listed species
irrespective of whether such measures are within the action
agency's statutory authority. 16 U.S.C. §§ 1536(e)(1)(3),
(h)(1)(B).
Accordingly, this is the paradigmatic case in which a
“‘udicial interpretation[] settled the meaning of an
existing statutory provision,” and Congress then mani-
fested its “‘intent to incorporate’” that interpretation into
the statutory scheme. Merrill Lynch, Pierce, Fenner &
Smith v. Dabit, 547 U.S. 71, 126 S. Ct. 1503, 1513 (2006)
(internal citation omitted). Moreover, application of that
principle is “particularly apt here,” id., because Congress
created a specific process for addressing any irreconcilable
conflicts between section 7(a)(2) and agency actions under
other statutory schemes.
B. Petitioners’ Remaining Arguments Are Base-
less
1. Petitioners argue that section 7(a)(2) does not
“impliedly repeal[]” the CWA’s transfer provision. EPA Br.
at 19. As EPA acknowledges, however, “‘[wjhen 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.’” Id. at 20
(quoting Morton v. Mancari, 417 U.S. 535, 551 (1974)); see
also Watt v. Alaska, 451 U.S. 259, 266-67 (1981) (courts
should adopt interpretations that “give effect to each” law
“while preserving their sense and purpose”).
44
Petitioners’ approach makes no genuine effort to “give
effect to each” of the laws at issue. To the contrary, par-
ticularly as now “clarified,” EPA’s position is that the
Court should hold that, although the plain terms of section
7(a)(2) surely apply to EPA’s “final action{s] authorizing”
State NPDES programs, NAHB App. 76, EPA may never-
theless disregard section 7(a)(2)’s consultation require-
ment and substantive prohibitions. That argument
obliterates, rather than gives effect to, the language and
purpose of section 7(a)(2).
There is no legal or practical justification for decimat-
ing section 7(a)(2) in this manner. Rather, the most
straightforward way of giving effect to both the ESA and
CWA - which EPA and FWS have previously recognized as
“compatible and complementary” statutory schemes,
NAHB App. 274, with “consistent” wildlife “protection
goals,” id. at 84 — is to do what the agencies successfully did
for many years before their reversal of position: use the
section 7 consultation process to devise reasonable methods
for ameliorating post-transfer impacts on federally listed
species of concern to Service biologists. Petitioners proffer
no reason why this common-sense approach, which has
already furthered the objectives of both statutes, cannot
also work here or with regard to any other applications.”
* Indeed, in Hill the Court observed that Congress “foresaw that
§ 7 would, on occasion, require agencies to alter” actions unrelated to
environmental! protection objectives. Hill, 437 U.S. at 186-87 (citing as
an example “Air Force practice bombing” activities that were affecting
whooping cranes). Accordingly, it makes no sense for EPA to contend
that it must disregard the provision when acting under a “complemen-
tary” conservation statute. NAHB App. 274; see also 16 U.S.C. § 1531(c
(declaring the “policy of Congress that Federal agencies shal] cooperate
(Continued on following page)
45
However, even if FWS were ultimately to conclude
that transfer to Arizona (or another State) would in fact
result in jeopardy or destruction of critical habitat and
that EPA cannot remedy the problem consistent with its
CWA duties that would sti/l not necessitate an “implied
repeal” analysis. Thus, Congress itself has established the
legal mechanism for “giving effect” to both statutes under
such circumstances by providing that EPA and/or the
State may invoke the Endangered Species Committee
exemption process.” .
2. Also misplaced is petitioners’ reliance on a FWS
regulation that provides that “section 7 ... appllies] to all
actions in which there is discretionary Federal involvement
or control.” 50 C.F.R. § 402.03 (emphasis added). The
simple answer is that EPA repeatedly stated in the court
below that it did not rely on that regulation in making its
decision. See supra at n.8; see also NAHB App. 43 n.19.
EPA cannot now contend that the Court should sustain the
transfer decision on the basis of a regulation that the
agency conceded had nothing to do with its action under
review. See Chenery, 332 U.S. at 196 (courts “must judge
with State and loca! agencies to resolve water resource issues in concert
with conservation of endangered species”) (emphasis added).
* Although the ESA and CWA can and should be harmonized, even
if they were found to conflict unavoidably, the correct result would not
be for the Court simply to disregard section 7(a)(2), as petitioners insist.
Rather, since the “text of Section 7(a)(2) unambiguously” does apply in
this context, EPA Br. at 20, it should be given effect as the “latter act”
passed by Congress. Posadas v. National City Bank of New York, 296
U.S. 497, 503 (1936). By the same token, there is nothing to prevent
Congress from specifically excluding any agency action from ESA
requirements, as Congress has done on several occasions. See, e.g.,
Mount Graham Coalition v. Thomas, 89 F.3d 554 (9th Cir. 1996)
(applying rider exempting telescope project from section 7(a)(2)).
46
the propriety of [agency] action solely by the grounds
invoked by the agency”).
But even if the Court were to consider this new
rationale, the regulation has no bearing on this case. The
regulation cannot “be applied to alter the clearly expressed
intent of Congress” in section 7(a)(2), Board of Governors
of the Federal Reserve System v. Dimension Financial
Corp., 474 U.S. 361, 368 (1986) and, in any event, EPA
does have “discretionary ... involvement or control,” 50
C.FR. § 402.03, particularly with regard to the considera-
tion of wildlife impacts, both before and after NPDES
transfer decisions are made. See supra at 8-9. Indeed, this
Court has observed that EPA has “broad authority to
oversee state [NPDES] programs,” Arkansas, 503 US. at
105, and EPA itself has recognized that its “authority to
disapprove an inadequate state program based upon [its]
informed judgment necessarily demonstrates discretionary
EPA control.” EPA Fifth Cir. Br. at 34 (emphasis added).
Even further, EPA is required to solicit and consider public
comment on transfer applications and thus, as the agency
has pointed out, “[iJf EPA were simply acting in a ministe-
rial fashion, such weighing of the merits of public com-
ments would not be necessary.” Jd.
” That the intervenors cited the regulation “in arguing that ...
Section 7(a\(2) was inapplicable” to the transfer decision, EPA Br. at 38
n.13, is of no legal moment because it is a bedrock principle of adminis-
trative law that an “agency’s action must be upheld, if at all, on the
basis articulated by the agency itself” at that time of its decision. State
Farm, 463 U.S at 50 (emphasis added). Moreover, even NAHB suggests
that it was appropriate for EPA and FWS to have consulted with regarc
to any “water-quality related impacts on listed species or critica
habitat.” NAHB Br. at 48.
47
Certainly, the mere fact that the transfer provision
has the word “shall” in it does not mean that EPA lacks
discretion in making decisions. See, e.g., Norton v. South-
ern Utah Wilderness Alliance, 542 U.S. 55, 66 (2004)
(statute providing that an agency “shall” prevent unneces-
sary or undue degradation of certain lands and resources
“is mandatory as to the object to be achieved, but it leaves
[the agency] with a great deal of discretion in deciding how
to achieve it”). Accordingly, when EPA loosely character-
izes the transfer provision as a Congressional “mandat|e],”
EPA Br. at 25, it is apparently arguing that whenever
Congress circumscribes an agency’s exercise of discretion
by delineating factors for an agency to consider in making
a decision (as Congress generally does), but does not
expressly include consideration of endangered species
impacts, then the section 7(a)(2) requirements cease to
apply. But that approach, once again, eviscerates section
7(a\(2) in a way that cannot possibly be supported by its
plain language; indeed, it resurrects the very construction
of section 7 that was rejected in Hill, i.e., that federal
agencies need only avoid jeopardizing species to the extent
“consistent with thelir] primary purposes.” 437 U.S. at 181
(internal citation omitted).
3. Petitioners argue that Department of Transporta-
tion v. Public Citizen, supra, supports the proposition that
“[slection 7(a)(2) applies only to conduct that is attribut-
able to the: federal agency itself” and that, if species go
extinct as a result of EPA’s transfer decision, that is the
fault of Congress, not the agency. EPA Br. at 14. That, of
course, is only a different way of saying that EPA’s au-
thorization of the Arizona program is not the kind of
agency action that triggers section 7(a)(2) — a position that
has no support in the language of the statute and that
48
recapitulates the central argument rejected in Hill, in
which TVA likewise argued that it was Congress's decision
to fund the dam, and hence the ESA should be ignored.
437 U.S. at 171.
In any case, the reasoning in Public Citizen supports
the proposition that EPA is required to comply with the
substantive mandate of section 7(a)(2), including by
consulting with FWS on all of the actual effects of the
transfer decision. Public Citizen concerned whether the
Federal Motor Carrier Safety Administration (“FMCSA”)
had complied with NEPA, which, as explained by the
Court, “imposes only procedural requirements on federal
agencies with a particular focus on requiring agencies to
undertake analyses of the environmental impact of their
proposals and actions.” 541 U.S. at 756-57 (emphasis
added). FMCSA had prepared an Environmental Assess-
ment evaluating the environmental effects of its regula-
tions establishing safety standards for trucks. Id. at 760-
62. Accordingly, the only issue was whether the agency’s
NEPA analysis was deficient because it failed to address
adequately the impacts associated with an “action of the
President” — who is not required to comply with NEPA — to
lift a moratorium on Mexican trucks entering the United
States. Id. at 769.
Focusing on the language and purpose of NEPA, the
Court held that where an agency “has no authority” to
take environmental impacts into account in making a
particular decision, then it “serve(s] ‘no purpose’ in light of
NEPA’s regulatory scheme as a whole” to require ar
agency to prepare a NEPA document thoroughly analyzing
those impacts. Jd. at 767 (internal citation omitted). The
Court reasoned that in view of NEPA’s purely procedura
requirements, impacts that could have no bearing on the
49
agency's decision were not “legally relevant” to the NEPA
analysis. Id. at 770.
Here, however, petitioners are advancing a far more
extreme position with respect to a fundamentally different
statutory obligation. Thus, although section 7(a)(2) prohib-
its “any” agency action that is likely to jeopardize the
continued existence of a species, and “contains a flat ban
on the destruction of critical habitats,” Weinberger v.
Romero-Barcelo, 456 U.S. at 314 (emphasis added), peti-
tioners contend that EPA’s authorizing action is not
subject to section 7(a)(2) at all. Moreover, as Hill itself
noted, NEPA decisions are “completely inapposite” in the
ESA context because NEPA “imposes a procedural re-
quirement on agencies,” but the “ESA is substantive in
effect, designed to prevent the loss of any endangered
species....” Hill, 437 U.S. at 188 n.34 (emphasis in
original).
Accordingly, as the Court further explained in Hill,
while “it would make sense to hold NEPA inapplicable” in
situations where an agency may not actually take any
action based on its NEPA analysis, “[s]ection 7, on the
other hand, compels agencies not only to consider the
effect” of their actions on endangered species, “but to take
such actions as are necessary to insure that species are not
extirpated as a result of federal activities.” Jd. (emphasis
in original); see also 1978 House Report, ESA Leg. Hist. at
743 (“each Federal agency is required to insure that any
action authorized, funded, or carried out by it does not
result in species or habitat degradation unless the action
has been exempted” by the Endangered Species Commit-
tee) (emphasis added). Thus, to apply Public Citizen in
this context would be to force a square precedential peg
into a round statutory hole.
-
50
CONCLUSION
The judgment of the court of appeals should be af-
firmed insofar as it was based on the inconsistency in
EPA’s approach to section 7(a)(2) and the case should be
remanded for further administrative proceedings.
Respectfully submitted,
Eric R. GLITZENSTEIN
(Counsel of Record)
KATHERINE A. MEYER
MEYER GLITZENSTEIN & CRYSTAL
1601 Connecticut Avenue, N.W.
Washington, D.C. 20009
(202) 588-5206
MICHAEL P. SENATORE
DEFENDERS OF WILDLIFE
1130 Seventeenth Street, N.W.
Washington, D.C. 20036
(202) 682-9400
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.