Amicus Curiae Brief — Environmental Protection Agency v. Defenders of Wildlife

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Nos. 06-340, 06-549

IN THE

Supreme Court of the United States

NATIONAL ASSOCIATION OF HOME BUILDERS, ef ai..

Petitioners,

Vv.

DEFENDERS OF WILDLIFE. ef al..

Respondents.

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY.

Petitioner,

Vv.

DEFENDERS OF WILDLIFE, ET AL..

Respondents.

On Writ of Certiorari to the United States

Court of Appeals for the Ninth Circuit

BRIEF OF AMICI CURIAE

HIGH PRODUCTION HOMEBUILDERS

IN SUPPORT OF PETITIONERS —

CARTER G. PHILLIPS

STEPHEN M. NICKELSBURG*

Eric A. SHUMSKY

R. JUGE GREGG

BRIAN E. NELSON

SIDLEY AUSTIN LLP

1501 K Street. N.W.

Washington. D.C. 20005

(202) 736-8000

Counsel for Amici Curiae

February 20, 2007 *Counsel of Record

SS a SA AARNE RE SE OL TSI

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

QUESTION PRESENTED

Amici will address the following question:

Whether, assuming that § 7 of the Endangered Species Act

applies to non-discretionary agency action, this provision is

nonetheless bounded by requirements of proximate causation

that prevent interference with the delegation to Arizona of

permitting authority under § 402 of the Clean Water Act.

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TABLE OF CONTENTS

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Ae ae FF te FI wrcecinsccscesenscsensecnscncscninnventcnee

INTERESTS OF ARICT CURIA .......ccoccovccescocccossecessesees

STATUTORY AND REGULATORY BACK-

Sn Tticitsihassiiicilciepeiiiachldstieitceiiasdealshdustonlintcemiiphanaitisentiotos

SUMMARY OF THE ARGUMENT ...................eceeeeeees

ITT sincisiclseisiecoecubinsnieliadasiunieidtibesicekdiealcegihidadianeiisiividin

I. THROUGHOUT THE LAW, PROXIMATE

CAUSE — NOT MERE BUT-FOR CAUSE - IS

THE DEFAULT RULE OF CAUSATION .............

A.To Prevent Limitless Liability, Proximate

Cause Is The Rule At Common Law...................

Il.

Ill.

B. Proximate Cause Is The Default Rule For Fed-

ET AO: SPLIT TN a ON re

SECTION 7 OF THE ESA AND ITS IMPLE-

MENTING REGULATIONS INCORPORATE

BASIC PRINCIPLES OF PROXIMATE CAUSE

et EE sy

A. This Court Has Interpreted ESA § 9 As Re-

B. Section 7 Of The ESA Likewise Requires

THE DECISION BELOW IMPROPERLY

ABANDONED TRADITIONAL CONCEPTS

OF PROXIMATE CAUSATION AND EM-

PLOYED AN EXTREME VERSION OF BUT-

IT ciiacssncsicicsdsjinassiecinnsibaiepnciddibianielibogale

eee NTN incsteieleialinigsthedivaciecehdaninldlalhienninibivceintabcatadaiiasiishaind

(itl)

Page

TABLE OF AUTHORITIES

CASES Page

Anza Vv. Ideal Steel Supply Corp., 126 S. Ct. 1991

REESE area rn enone eae a ee Oe 11, 12, 24

Archer v. Warner, 538 U.S. 314 (2003).........0000008 24

Associated Gen. Contractors of Cal., Inc. v. Cali-

fornia State Council of Carpenters, 459 U.S.

SRST TIERS 9,10, 11, 21

Babbitt v. Sweet Home Chapter of Cmtys. for a

Great Or., 515 U.S. 687 (1995)...........cscsccceceeees passim

Benefield v. Exxon Corp., 959 F.2d 805 (9th Cir.

ari ichibshasensiesiniiasulibsidichiaiabiiguenaiiatiniatatibiddidatcenanttiidiactinets 15

Bennett v. Spear, 520 U.S. 154 (1997)... cece 3,25

Brower v. County of Inyo, 489 U.S. 593 (1989) ..... 18

County of Westchester v. Town of Greenwich, 76

a PII TIPTREE scoscrnisieierisashnnseesonandinesenmpstinnese 15

Defenders of Wildlife v. EPA, 420 F.3d 946 (9th

eta AEE hacieidaicietiaseesbbuaddieesbiiinapaiiseneigiinns 6, 15, 20, 21, 26

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

Se caicicecisnesbcciindaiapimieniagleniidhitabuntisidaiialilaasiaieaniaie 13

Dura Pharms., Inc. v. Broudo, 544 U.S. 336

STII sseeeasiedieiihadiesiisinetistaelciiiisiitenieiideiiciaiauiiiildnete 11,12

Exxon Co., U.S.A. v. Sofec, Inc., 517 U.S. 830

SS TTTTEthaiehisihisusciadeaniieneidetaiiitininandinasibasdiaaiamneaeiitinienasens 9,11

Florida Audubon Soc'y v. Bentsen, 94 F.3d 658

isaac AI ia id ceaideadtebpoeianseeseaindeuneninasiecaenibintinnie 23

Glass Packaging Inst. v. Regan, 737 F.2d 1083

(D.C. Cir. 1984), overruled in part on other

grounds as explained in Hazardous Waste

Treatment Council v. EPA, 861. F.2d 277 (D.C.

ai SE ichiiciataiisanidebeandstidentinuamnminieenmeneieiianicaeenss 26

Holmes vy. Securities Investor Prot. Corp., 503

ee nicniicnicincannicninstessenuninsenecmiete 10, 12, 24

Loggerhead Turtle v. County Council, 92. F.

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

TABLE OF AUTHORITIES ~ continued

STATUTES

Page

Lujan v. Defenders of Wildlife, 504 U.S. 555

SWI A cosnensonncingesnscsnnintovateadeiinensiuiaanania ae 23

Metropolitan Edison Co. v. People Against Nu-

clear Energy, 460 U.S. 766 (1983)........ 13, 14, 19, 22

National Wildlife Fed’n v. Hodel, 839 F.2d 694

CHE ER, Fi iceccncnsinerivniistetdieseietseniiiiaiaamanmmmin 17

Natural Res. Def. Council, Inc. v. EPA, 822 F.2d

BPO GN. CR, DUI GD scccctcsiccedaticscatindionmeaaaaatas 27

Siggers v. Barlow, 906 F.2d 241 (6th Cir. 1990).... 24

Strahan v. Coxe, 127 F.3d 155 (1st Cir. 1997) ....... 26

Southern Pac. Co. vy. Darnell-Taenzer Lumber

Co., 24S U.S. S31 (1918) ......0cczscsesees 9,10, 11, 21,24

TVA V. Hill, 437 U.S. 153 (1978)..........000ccscccssseseeee 14

United States v. Wells, 519 U.S. 482 (1997)........... 8

United States v. West of Eng. Ship Owner's Mut.

Prot. & Indem. Ass'n (Lux.), 872 F.2d 1192

CFE GAR. FIP icconcorsnicsciincssinsiidienmeniinniignananaiie 15

Waters-Pierce Oil Co. v. Deselms, 212 U.S. 159

CBD Piscvcscsnssrsccssesionsisdastuimnmasdiiadaa 18

National Housing Act of 1934, ch. 847, 48 Stat.

1246 (codified as amended at 12 U.S.C. § 1701

O08 BOE, ) .0.<c.0s0esinssneteinsreianmmmemnennpmelaae I

Housing Act of 1961, Pub. L. No. 87-70, 75 Stat.

SOD ..vccsesessosssneneceiinnidadiaiaiasesiiemmmamaiannn ]

Department of Housing and Urban Development

Act of 1965, Pub. L. No. 89-174, 79 Stat. 667 .... l

Tits toe |. en 1!

16 USL. § 1596 (19 7D)... nrnnrnrsmsrntsadciaaaniie 18

"FUT E 4,15, 25

DF TOMOU <ccceccosscsnnseseammibhaesnasduinaiiaiinaanee 4

TABLE OF AUTHORITIES — continued

Page

a cnet a araremnneceatitiiin 1]

Ee ve 1]

| EEE Cee ae Cea l

Ene Corea 2

ve On l

ee oe 13,14

5 Ene eee SR l

I TI sccsstiicentinliticitcitenciananitinegntinntdianane 25

8 ST eee Oe 19, 20

nee cme 20

|| Ne er ae 19

EE arr & 4,19, 20

Interagency Cooperation — Endangered Species

Act of 1973, as amended, 51 Fed. Reg. 19,926,

ee NE is TIED ccsersenenepmeeninasiainnnnsnnsed 4, 14, 20, 23

Final Rule to Remove the Arizona Distinct Popu-

lation Segment of the Cactus Ferruginous

Pygmy-owl From the Federal List of Endan-

gered and Threatened Wildlife, 71 Fed. Reg.

een Mee 27

LEGISLATIVE HISTORY

H.R. Conf. Rep. No. 96-697 (1979), reprinted in

Ee Same 18

SCHOLARLY AUTHORITIES

Charles Fisk Beach, Jr., A Treatise on the Law of

Contributory Negligence or Negligence as a

Ee MN &

Dan D. Dobbs, The Law of Torts (2001)................. 10

William B. Hale, Handbook on the Law of Torts

EE cee Sn )

W. Keeton et al., Prosser and Keeton on the Law

SIS HOTU cctscntesiccscncsacsorstocene 9 10. 19, 20

vii

TABLE OF AUTHORITIES — continued

Page

Robert V. Percival et al., Environmental Regula-

tion: Law, Science, and Policy (2d ed. 1986)...... 15

1 Thomas G. Shearman & Amasa A. Redfield, A

Treatise on the Law of Negligence (Sth ed.

rite chensinpiehlitienitcenpaitenestnbiabibinemndadianidaiasaitennneseentiliontee 8

| J.G. Sutherland, A Treatise on the Law of Dam-

GIO CITED eccoveccscsesensszsvnetresscsnsvsnvetansonssssescorenenere 10

OTHER AUTHORITIES

Cambridge Dictionary of American English

IEEE aiadeaeentetsemidanneniiadiqnninendtepiniatiaianiundnnis 17

Restatement (Second) of Torts (1965) ...9, 15, 22, 23, 24

Restatement (Third) of Torts: Apportionment of

Re Eee ccictencssinerllbnncasitstincminisicicinesnciiansentiian 9

Roget's Il: The New Thesaurus (1988) .................. 17

Arizona Ecological Servs. Field Office, FWS,

Cactus Ferruginous Pygmy-Owl (Jan. 2003), at

http://www.fws.gov/southwest/es/arizona/

Documents/Redbook/Cactus%20Ferruginous

%20Py gmy%~20ow L. pe ...............cccccessereceeseeceeeeees 27

Arizona Ecological Servs. Field Office, FWS,

Cactus Ferruginous Pygmy-Owl Survey Proto-

col (Jan. 2000), at http://www.fws.gov/south-

west/es/Arizona/Documents/PublicReview/

CFPO/FINAL REV_PROTOCOL.pdf............... 27

Arizona Ecological Servs. Field Office, FWS,

Pima Pineapple Cactus (June 2000), at http://

www.fws.gov/southwest/es/arizona/Documents

/Redbook/Pima%20Pineapple%20cactus%20

Arizona Ecological Servs. Field Office, FWS,

Pima Pineapple Cactus, ar http://www.fws.gov/

southwest/es/arizona/pima.htm (last visited

Sa: Ma Ue Piacente hnitonedesbnaaicelialdasipsaaiadidespesipiie 27

Vill

TABLE OF AUTHORITIES — continued

Page

Felicity Barringer, Endangered Species Act Faces

Broad New Challenges, N.Y. Times, June 26,

SEITTTE ssnsastiadlbnceseusinniiniaeasiiniuipianaduiiindamciianeiaeitaniiihine 6

Gillian Flaccus, City May Shoo Endangered Fly,

8 ee 6

GAO, Pub. No. GAQ-04-93, Endangered Spe-

cies: More Federal Management Attention Is

Needed to Improve the Consultation Process

Press Release, NAHB, Pygmy Owl Delisting

Makes Sense For Environment And Home

Buyers, NAHB Says (Apr. 14, 2006), at http://

www.nahb.org/news_details.aspx?newsI D=

eR itnticeniennriacesiccietniiemesiiictnsnes 5,6

Mitch Tobin, ‘Endangered’ Cactus May Really

Be Prolific, Ariz. Daily Star (May 9, 2004)......... 6

USEPA, National Pollutant Discharge Flimina-

tion System (NPDES): State Program Status, at

http://cfpub.epa.gov/npdes/statestats.cfm (last

I es

USEPA, State or Tribal Assumption of the Sec-

tion 404 Permit Program, at http://www.epa.

gov/owow/wetlands/facts/fact23.html (last up-

8 Fe ee eee 2

INTERESTS OF AMICI CURIAE'

Amici Beazer Homes USA, Inc., Centex Corporation,

David Weekley Homes, Hovnanian Enterprises, Inc., KB

Home, Kimball Hill, Inc., Lennar Corp., M.D.C. Holdings,

Inc., Meritage Homes Corporation, M/l Homes, Inc., Pulte

Homes, Shea Homes, Standard Pacific Corp., Toll Brothers,

Inc., and Weyerhaeuser Real Estate Co. (collectively, “High

Production Homebuilders”) are 15 of the largest residential

homebuilders in the Nation. Amici engage in residential con-

struction on all scales, from the design of individual homes to

the development of large residential communities. In 2005

alone, amici sold more than 262,000 homes, generating over

$90.9 billion in revenue and representing over 20% of the

United States new home market. In providing these homes to

the Nation’s population, amici not only satisfy a fundamental

human need, they also promote a critical national priority, as

Congress has reaffirmed over and over again.

Before they begin homebuilding projects, amici typically

must obtain permits under a variety of federal, state and local

regimes. These include the type of Clean Water Act (CWA)

permits at issue in this case, which allow point-source dis-

charges to the waters of the United States. See CWA § 402,

33 U.S.C. § 1342. And they include other federal permits,

' Pursuant to this Court’s Rule 37.6, amici state that no counsel for any

party authored this brief in whole or in part, and no person or entity other

than amici made a monetary contribution to the preparation or submission

of the brief. Counsel of record for all parties have consented to the filing

of this brief, and letters of consent have been filed with the Clerk.

* See 42 U.S.C. § 1441 (“The Congress declares that the general wel-

fare and security of the Nation and the health and living standards of its

people require housing production and related community develop-

ment ...."), id § 12701 (affirming “the national goa! that every American

family be able to afford a decent home in a suitable environment”); see

also, eg., National Housing Act of 1934, ch. 847, 48 Stat. 1246 (codified

as amendec at 12 U.S.C. § 1701 ef sey): Housing Act of 1961, Pub. L.

No. 87-70, 75 Stat. 149; Department of Housing and Urban Development

Act of 1965, Pub. L. No. 89-174, 79 Stat. 667.

such as permits for the discharge of fill material under § 404

of the CWA. Id. § 1344. Before such federal permits may

be issued, § 7 of the Endangered Species Act (ESA) generally

requires the federal agencies permitting the undertaking ——

here, the Environmental Protection Agency (EPA) -— to en-

gage in “consultation” with the Fish and Wildlife Service

(F WS) or the National Marine Fisheries Service (NMFS) and

to ensure that their actions will not cause jeopardy to species.

The nature and scope of these inter-agency consultations

and actions are profoundly important to amici, because they

are immensely burdensome and time-consuming. The permit-

ting process for a residential development can take years and

cost hundreds of thousands of dollars — figures often com-

pounded by interest-group litigation when the permit finally

issues. And agency-ordered “alternative measures” may cost

millions. Accordingly, amici have a substantial interest in

ensuring that the consultation requirement remains within the

boundaries established by Congress and the agencies’ own

regulations. The decision below fails to follow the proper

scope of these authorities.

Like Petitioners EPA and NAHB, amici urge this Court to

hold that, as a matter of law, the transfer of NPDES permit-

ting authority from EPA to Arizona was nondiscretionary and

therefore did not require ESA consultation at all. The focus

of this Brief. however, is the question that this Court must

address if it concludes that consultation was not categorically

excluded: namely, the requisite causal relationship between

an agency action and claimed jeopardy to species. This cau-

> EPA has delegated the § 402 discharge permitting program to 45 of

the 50 States (including Arizona). See USEPA, National Pollutant Dis-

charge Elimination System (NPDES): State Program Status, at http:’/

cfpub.epa.gov/npdes’statestats.cfm (last updated Apr. 14, 2003). How-

ever, the § 404 dredge and fill permitting program has been delegated to

only two States. New Jersey and Michigan. See USEPA, State or Tribal

Assumption of the Section $04 Permit Program, at bitp:’'www.epa.

gov/owow wetlands facts fact23.htm! (last updated Feb. 22. 2006).

sation requirement both triggers the consultation requirement

and defines its scope. Under the text of the ESA, its imple-

menting regulations, this Court’s longstanding causation ju-

risprudence — and indeed any common-sense understanding

of causation — the agency action must be a proximate cause of

the claimed “jeopardy.” ‘That is, the agency must evaluate

whether an action will result in harm to species that is direct

and foreseeable, not remote, attenuated, or speculative.

The alternative the Ninth Circuit adopted — bare “but-for”

causation — would force agencies to engage in far-reaching

analyses of hypothetical effects. Moreover, it would fore-

close any agency action that could imaginably result in harm,

no matter how remote that possibility or how attenuated the

chain of causation. This cannot be what Congress intended,

which is why nothing in the statute, its regulations or its legis-

lative history supports such an extreme result. Yet this is pre-

cisely what the Ninth Circuit held: The court below con-

cluded that the simple act of transferring permitting authority

from EPA to the State of Arizona would cause jeopardy to

species, notwithstanding the substantial causal remoteness

between this “action” and any surmised harm. This decision

would amount to an extraordinary expansion of the ESA,

which this Court should reject.

STATUTORY AND REGULATORY BACKGROUND

I. The § 7 consultation process arises out of the require-

ment that federal agencies “insure that any action [they] au-

thorize| |. fund||, or carr[y] out” is “not likely” to jeopardize

any endangered or threatened species or to adversely modif¥

critical habitat. 16 U.S.C. § 1536(a)(2): see generally Bennett

v. Spear. 520 U.S. 154, 157-58 (1997). Consultation is an

interagency dialogue between (1) the “action agency” that

intends to authorize, fund, or carry out an action, and (2) the

agencies with authority related to species (FWS and NMFS:

collectively. the “Services”), and involving interested private

‘parties, such as an applicant for a federal permit.

To determine whether consultation is required, the “action

agency” first identifies whether a protected species or habitat

exists within the proposed action area and whether the pro-

posed action “may affect” the species or habitat. 50 C.F.R.

§ 402.14(a). If so, the “action agency” must engage in forma!

consultation with the Service, subject to two important excep-

tions. /d.; see Interagency Cooperation - Endangered Species

Act of 1973, as amended, 51 Fed. Reg. 19,926, 19,941 (June

3, 1986) (“A Federal agency must initiate formal consultation

if it determines that its action ‘may affect’ any listed species

or its critical habitat unless it determines through informal

consultation or biological assessment procedures, with the

written concurrence of the Service, that its action ‘is not

likely to adversely affect’ such species or habitat.”).

Formal consultation requires the Service to prepare a “bio-

logical opinion” (BiOp) evaluating whether the action is

“likely to jeopardize” a protected species. 50 C.F.R.

§ 402.14(h). During this evaluation— which often requires

multiple rounds of discussions between the agencies — the

“action agency” must provide substantial information to the

Service. /d. § 402.14(c)-(g). If the Service ultimately reaches

a “no jeopardy” conclusion, the action can go forward. /d.

§ 402.14(h). If. however, the Service concludes that the ac-

tion is likely to jeopardize a protected species, it will recom-

mend project modifications. /d. If no such alternatives exist,

the agency must cancel the action, seek an exernption, or risk

violating the ESA. A developer that proceeds without the

blessing of the consultation process ts in turn potentially sub-

ject to suit under § 9 of the ESA, with the attendant threat of

civil and criminal penalties. See 16 U.S.C. §§ 1538, 1540(a),

(b). (yz).

11. The consultation process is fraught with problems, in-

cluding delay and expense. See GAO, Pub. No. GAO-04-93,

Endangered Species: More Federal Management Attention Is

Needed to Improve the Consultation Process (2004) ("GAO

Report”). After examining several years’ worth of consulta-

tion records, the GAO concluded that 30-40% of the Services’

consultations exceeded the time frames established by statute

or regulation. /d. at 3. Indeed, these statistics understate the

delay, because they exclude the “sometimes significant

amount of preconsultation time spent discussing a project be-

fore the consultation is considered to have officially begun” —

a period during which the action cannot proceed. /d.; see also

id. at 17 (noting that preconsultation time “may account for

the majority of the time spent on the entire consultation proc-

ess” (emphasis added)).

For a private party, the costs and delays of becoming en-

tangled in consultation can be significant. For example, the

listing of the bull trout caused the average processing time for

permits to build private docks or structures on Lake Washing-

ton-(near Seattle) to increase from 2-3 months to two years.

Id. at 55-56. The pygmy owl listing caused delays of 5-18

months. See http://www.nahb.org/news._details.aspx?newsID

=2379&section! D=194 (“NAHB Release”).

These burdens are compounded because the Services often

push the bounds of their statutory and regulatory authority to

and beyond their limits. According to the GAO, “action

agency” officials reported “that the process had gotten out of

control, that they were consulting on many more activities

than was necessazy, and that consultations were going beyond

what was called for by the Endangered Species Act.” GAO

Report at 43. For example, “the Services sometimes recom-

mend consultation when it is not really necessary and ... they

request similarly unnecessary amounts of scientific analysis

and documentation on potential effects.” /d. at 39.

Agency delay and overreach beget private costs. These

costs involve the actual expenses incurred during the consul-

tation process: increased costs of unwarranted or unauthor-

ized project modifications and mitigation: and of course op-

portunity costs. Applicants frequently must hire private con-

sultants to assist in the preparation of biological assessments

and mitigation plans and to negotiate with the agencies, often

at substantial cost. /d. at 55. In the case of the bull trout, per-

mitting costs — which had been 5% of the total construction

costs for a typical dock — rose to 33% of that total cost. /d. at

54. The consultation and project modifications ensuing from

the pygmy owl listing added $1.7 - $2.7 million to the cost of

a typical Arizona development. See NAHB Release. Similar

stories abound, with compliance, consultation and mitigation

giving rise to massive costs that an overly broad causation

standard will only compound.’

SUMMARY OF THE ARGUMENT

The decision below depended in part on the erroneous con-

clusion that the ESA prohibits any agency action that could,

under a but-for causation standard, result in “jeopardy” to

protected species, no matter how tangential or remote the link

might be. Defenders of Wildlife v. EPA, 420 F.3d 946, 962

(9th Cir. 2005). This interpretation finds no support in law or

logic. Throughout the law, proximate causation is the domi-

nant standard, and absent strong congressional intent to the

contrary, serves as the default rule. Proximate cause is the

core causation standard under the common law, as this Court

has repeatedly recognized. It is the presumptive standard in

federal statutes —- even those with broad language of causa-

* See, e.g., Gillian Flaccus, City May Shoo Endangered Fly, Chi. Trib.,

Feb. 11, 2007 (“[Colton, California officials] say restrictions on building

on the [Dethi Sands flower-loving fly] habitat have limited commercial

growth and cost tens of millions of dollars in economic development.”): -

Felicity Barringer. Endangered Species Act Faces Broad New Challenges,

N.Y. Times, June 26, 2005 (citing Agua Caliente Band of Cahuilla Indi-

ans’ claim that more than half the tribe’s 31.000 acres fall into designated

habitat, resulting in “*an economic impact of hundreds of millions of dol-

lars’”); Mitch Toten. ‘Endangered’ Cactus Mav Really Be Prolific, Ariz.

Daily Star, May 9, 2004 (“The [Pima pineapple] cactus may force one

prominent builder to raise the price of 72 homes by $1,181 each. In the

mid- 1990s, the cactus threatened to add $10 million to the cost of a pro-

posed 6S0-acre reservoir on the Southwest Side for the Central Arizona

Project. The proposal was later shelved.”).

tion. Environmental statutes such as the ESA are no excep-

tion. In Babbitt v. Sweet Home Chapter of Communities for a

Great Oregon, for instance, all nine Justices treated proximate

cause as the “ordinary requirement|]” and applied it to § 9 of

the ESA. 515 U.S. 687, 696 n.9 (1995).

Nothing in § 7 of the ESA or its implementing regulations

suggests that Congress intended to impose any standard other

than the “ordinary” rule of proximate cause. To the contrary,

the text and implementing regulations affirmatively show that

§ 7 incorporates the usual rule of proximate causation. Over

and again, § 7 and its regulations employ terminology well-

understood as denoting proximate cause. Moreover, the legis-

lative history of the Act reveals a clear desire to avoid the

costs and bureaucratic complications arising out of a regime

predicated on but-for causation.

Here, the transfer of permitting authority from EPA to Ari-

zona is far too remote from the hypothesized harm to satisfy

proximate cause. The transfer itself does not authorize any

harm to species at all — it authorizes no permit to issue and no

development to occur, much less any activity that is intrinsi-

cally harmful. Instead, the transfer simply means that the

Arizona agency may issue-permits sometime in the future.

Moreover, thos permits do not themselves primarily induce

development; individual development decisions are based on

numerous independent. intervening factors, including the fi-

nancial market. supply, demand, and political choice. And if

development does occur. any harm to species remains specu-

lative, especially because substantial other protections for

species exist. Finally, the causal chain between the water dis-

charge permits and the hypothesized harms to species — which

are entirely “non-water quality related impacts,” NAHB Pet.

App. 562 (Elevation Document) — is far too attenuated to war-

rant application of the ESA.

ARGUMENT

I. THROUGHOUT THE LAW, PROXIMATE

CAUSE —- NOT MERE BUT-FOR CAUSE - IS THE

DEFAULT RULE OF CAUSATION.

The view of causation adopted by the Ninth Circuit is with-

out meaningful limit and would have absurd practical effects.

It is, moreover, antithetical to the common-law understanding

of proximate causation, as well as this Court’s clear applica-

tion of that principle to federal statutes in all areas of law.

Particularly in the context at issue here, where the law re-

quires agencies to predict, analyze, and mitigate the future

effects of their proposed actions, it is essential to apply a

proximate-cause standard that imposes sensible limits on

agency inquiry and legal responsibility.

A. To Prevent Limitless Liability, Proximate Cause

-Is The Rule At Common Law.

It is a fundamental precept of statutory construction that

Congress enacts statutes against the backdrop of the common

law. Congress is presumed to know the standards that exist at

common law and, absent a clear indication to the contrary, to

incorporate them in the statutes it enacts. Sce, e.g., United

States v. Wells, 519 U.S. 482. 491 (1997). Nothing remotely

suggests that Congress abrogated common-law principles

when it enacted the ESA. See Sweet Home, 515 U.S. at 697

n.9, 700 n.13; see also infra Part Il. Accordingly, to under-

stand the causal relationship between an agency “action” and

potential “jeopard[y]” to species that is necessary to trigger

the ESA's statutory consultation requirement, 16 U.S.C.

§ 1536(a)(2), we begin with the common law.

For more than = century, the common-law rule of causation

has been proximate cause. See, e.g. | Thomas G. Shearman

& Amasa A. Redfield. 4 Treatise on the Law of Negligence

§ 26, at 27 (Sth ed. 1898) ("The breach of duty, upon which

an action is brought, must be not only the cause. but the

proximate cause, of the damage to the plaintuff.~): Charles

Fisk Beach, Jr., A Treatise on the Law of Contributory Negli-

- gence or Negligence as a Defense § 305, at 446 (3d ed. 1899)

(proximate cause is “too firmly founded on reason and justice

to be lost sight of in any discussion of liability for negli-

gence”); William B. Hale, Handbook on the Law of Torts

§ 227, at 449 (1896). This Court has long recognized proxi-

mate cause as the common-law rule. See, e.g., Southern Pac.

Co. v. Darnell-Taenzer Lumber Co., 245 U.S. 531, 533-34

(1918) (using proximate cause under Federal Employers Li-

ability Act, which incorporates common law standards); see

also Associated Gen. Contractors of Cal., Inc. v. California

State Council of Carpenters, 459 U.S. 519, 531-33 (1983)

(discussing the settled proximate cause standard at the end of

the 19th century). And proximate cause continues to be the

common-law rule today. See Restatement (Second) of Torts

§§ 281(c), 430-462 (1965): Restatement (Third) of Torts: Ap-

portionment of Liability § 3 (2000).

Proximate cause has been adopted so widely because the al-

ternative — “but-for” causation — is no meaningful alternative

at all. But-for cause merely asks whether the alleged harm

would have occurred in the absence of (i.e., “but for”) the

complained-of action. This rule leads to “extreme results,”

because “‘the consequences of an act go forward to eternity.

and the causes of an event go back to the dawn of human

events, and beyond.”” Exxon Co., U.S.A. v. Sofec, Inc., 517

U.S. 830, 838 (1996); see also W. Keeton et al.. Prosser and

Keeton on the Law of Torts § 41, at 266 (Sth ed. 1984)

(“Prosser & Keeton’) (“The event without millions of causes

is simply inconceivable ....°); Restatement (Second) of Torts

§ 431 cmt. a. Given this truism, a statute dictating conduct or

resting liability on mere but-for causation would be poten-

tially limitless:

“The chief and sufficient reason for [proximate cause] is

to be found in the impossibility of tracing consequences

through successive steps to the remote cause. and the

necessity of pausing in the investigation of the chain of

events at the point beyond which experience and obser-

vation convince us we cannot press our inquiries with

safety.”

Associated Gen. Contractors of Cal., 459 U.S. at 532 n.24

(quoting T. Cooley, A Treatise on the Law of Torts 73 (2d ed.

1888)); accord 1 J.G. Sutherland, A Treatise on the Law of

Damages 57 (1883).

Simply put, proximate cause is necessary “to hold the de-

fendant’s liability within some reasonable” — and objectively

justifiable — “bounds.” Prosser & Keeton § 44, at 302. And

it serves to prevent liability from being imposed for “remote

consequences.” Sweet Home, 515 U.S. at 713 (O’Connor, J.,

concurring); accord Southern Pac. Co., 245 U.S. at 533-34

(“The general tendency of the law, in regard to damages at

least, is not to go beyond the first step. As it does not attribute

remote consequences to a defendant so it holds him liable if

proximately the plaintiff has suffered a loss.”). Proximate

causation thus acts as a “tool[{j to limit a person’s responsihil-

ity for the consequences of that person’s own acts.” Holmes

v. Securities Investor Prot. Corp., 503 U.S. 258, 268 (1992).

This tool reflects both “*ideas of what justice demands’” and

“of what is administratively possible and convenient,” id.

(quoting Prosser & Keeton § 41, at 264), as well as an effort

to draw a line as to the “appropriate scope of responsibility,”

Dan D. Dobbs, The Law of Torts § 180. at 443 (2001). The

inquiry thus works toward answering a single question:

whether the complained-of action is “so closely connected

with the result and of such significance that the law is justi-

fied in imposing liability.” Prosser & Keeton § 41, at 264.

B. Proximate Cause Is The Default Rule For Fed-

eral Statutes.

1. Given the ubiquity of proximate causation at common

law — and the practical necessity of the rule for preventing

limitless liability - it is unsurprising that proximate cause is

the detault rule for federal statutory law. The rule of proxi-

mate cause has such force that this Court frequently has inter-

preted statutes that specify no particular causation standard as

incorporating the usual rule of proximate cause. See Anza v.

Ideal Steel Supply Corp., 126 S. Ct. 1991, 1995-98 (2006);

Dura Pharms. v. Broudo, 544 U.S. 336, 342-48 (2005); Sofec,

517 U.S. at 836-39 (1996): /lolmes, 503 U.S. at 268; Associ-

ated Gen. Contractors of Cal., 459 U.S. at 529-337; Southern

Pac. Co., 245 U.S. at 533-34.

In Associated General Contractors, for instance, this Court

interpreted an exceptionally broad statutory provision as in-

corporating customary principles of proximate causation. The

Claytor ct’s private damages provision authorizes a cause

of action for “[a]ny person who shall be injured in his busi-

ness or property by reason of anything forbidden in the anti-

trust laws.” 15 U.S.C. § 15 (emphasis added). Although the

Court observed that a “literal reading of the statute is broad

enough to encompass every harm that can be attributed di-

rectly or indirectly to the consequences of” a forbidden act, it

declined to impose such but-for liability, hecause that would

“encompass every conceivable harm that can be traced to al-

leged wrongdoing.” 459 U.S. at 529, 536; see also id. at 534

(“Congress did not intend the antitrust laws to provide a

remedy in damages for all injuries that might conceivably be

‘raced to an antitrust violation.”” (emphasis added)). In short,

to ensure that the inquiry of the courts remains squarely

within manageable limits, doctrines such as foreseeability and

proximate causation are applied.

This Court likewise has interpreted broadly worded racket-

ecring and securities law provisions as requiring proximate

cause. In Holmes v. SIPC, the Court evaluated the causation

requirement of the Racketeering-Influenced and Corrupt Or-

ganizations Act (RICO), 18 U.S.C. § 1961 ef seg. Like the

Clayton Act, RICO requires only an injury “by reason of” a

statutory violation. /d § 1964(c). Noting that “|t}his lan-

vuage can, of course, be read to mean” that “the defendant's

Violation was a “but for’ cause of the plaintiff's injury.” the

Court found it implausible that Congress intended to impose

liability on such a thin basis. 503 U.S. at 265-66. The Court

relied on the rationale that has supported the doctrine of

proximate cause for more than a century:

“In a philosophical sense, the consequences of an act go

forward to eternity, and the causes of an event go back

to the dawn of human events, and beyond. But any at-

tempt to impose responsibility upon such a basis would

result in infinite liability for all wrongful acts, and would

‘set society on edge and fill the courts with endless liti-

gation.”

Id. at 266 n.10. Practical considerations, too, militated

against but-for causation: “[T]he less direct an injury is, the

more difficult it becomes” to determine whether the injury is

attributable to the complained-of conduct “as distinct from

other, independent, factors.” /d. at 269; accord Anza, 126 S.

Ct. at 1998 (“The element of proximate causation ... is meant

to prevent these types of intricate, uncertain inquiries from

overrunning RICO litigation.”).

Dura presented a similar issue under the securities laws.

Again, the statute did not specify the necessary causal con-

nection; it simply required proof “that the defendant's misrep-

resentations ‘caused the loss for which the plaintiff seeks to

recover.’” 544 U.S. at 345-46. And again, this Court looked

to “the common-law roots” of the cause of action, and held

that the plaintiff “need[s] to prove proximate causation.” /d

at 344. ;

2. These longstanding principles — which have applied to

limit liability in retrospective damages inquires are even

more important where (as here) they involve a prospective

inquiry. In the context of backward-looking liability, an in-

jury already has occurred. and the case for relief is manifest.

Yet even there. the law deems many actions to be too remote

and tenuous to be the legal cause of an actual harm. and so

embraces proximate cause.

Cases involving prospective inquiries, which involve huge

administrative costs and carry the risk of substantial financial

consequences, create even greater opportunity for endless hy-

pothetical conjecture. As a result, without a meaningful

proximate cause standard, suits for prospective relief would

be limited only by the imagination of the plaintiff or, as here,

the agency's speculation about what future effects might oc-

cur, Thus, there is no reason to treat causation differently in

statutes requiring affirmative conduct — if anything, the justi-

fication for a meaningful proximate cause standard is

stronger.

This Court recognized this concern in defining the effects

that agencies must examine under the National Environmental

Policy Act (NEPA). NEPA requires agencies engaging in

“major Federal actions significantly affecting the quality of

the human environment” to complete “a detailed statement ...

on (i) the environmental impact of the proposed action, [and]

(ii) any adverse environmental effects which cannot be

avoided should the proposal be implemented.” 42 U.S.C.

§ 4332(C). In Metropolitan Edison Co. v. People Against

Nuclear Energy, 460 U.S. 766, 774 (1983), and again in De-

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

(2004), the Court held that “a ‘but for causal relationship is

insufficient to make an agency responsible for a particular

effect,” 541 U.S. at 767, and thus is insufficient to require the

agency to analyze that effect under NEPA.

In Metropolitan Edison, the Court reasoned that NEPA re-

~ quires “a reasonably close causal relationship between a

change in the physical environment and the [prospective] ef-

fect at issue.” which it interpreted as being “like the familiar

doctrine of proximate cause from tort law.” 460 U.S. at 776

(citing W. Prosser, Law of Torts ch. 7:(4th ed. 1971)). This

was necessary to limit the drain on “time and resources” that

would result if an agency were forced to examine hypotheti-

cal. attenuated effects:

[A]gencies would, at the very least, be obliged to expend

considerable resources .... The available resources may

be spread so thin that agencies are unable adequately to

pursue protection of the physical environment and natu-

ral resources.... [W]e cannot attribute to Congress the in-

tention to ... open the door to such obvious incongruities

and undesirable possibilities.

/d. (internal citation and quotation marks omitted). In this

context, a rule of but-for causation would require the evalua-

tion of an endless regression of causes and hypothesized,

eventual effects. Proximate cause, accordingly, serves the

necessary goal of conserving scarce agency resources:

Time and resources are simply too limited for us to be-

lieve that Congress intended to extend NEPA as far as

the Court of Appeals has taken it. The scope of the

agency’s inquiries must remain manageable if NEPA’s

goal of ‘ensur[ing] a fully informed and well considered

decision’ is to be accomplished.

Id. at 776 (quoting Vermont Yankee Nuclear Power Corp. v.

NRDC, 435 U.S. 519, 551 (1978)). In short, the use of a but-

for standard would sweep in so many possible effects, and the

agencies’ required analysis would as a result be so burden-

some, that the core statutory goal would be undermined.

These considerations apply with even greater force here.

Section 7 of the ESA, like NEPA, entails a prospective analy-

sis of the “effects” that may flow from an agency action. But

whereas NEPA simply requires “a detailed statement” of

those effects, 42 U.S.C. § 4332(C), the ESA requires the

agency to “insure” that such adverse effects do not occur. 16

U.S.C. § 1536(a\(2); see also TVA v. Hill, 437 U.S. 153, 173

(1978). Accordingly, FWS has recognized that “NEPA ...

warrant|s] a more expanded review” than does the ESA. In-

teragency Cooperation, 51 Fed. Reg. at 19.933 (emphasis

added). The Ninth Circuit’s contrary rule’ would lead to

wide-ranging inquiries into remote and hypothetical harms.

Il. SECTION 7 OF THE ESA AND ITS IMPLEMENT-

ING REGULATIONS INCORPORATE BASIC

PRINCIPLES OF PROXIMATE CAUSE AND

FORESEEABILITY. |

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

ing Proximate Cause.

As Metropolitan Edison and Public Citizen demonstrate,

environmental law is no exception to the presumptive rule of

proximate cause. Those cases applied proximate cause to

NEPA, and proximate cause is the rule in other environmental

statutes as well. See, e.g., United States v. West of Eng. Ship

Owner's Mut. Prot. & Indem. Ass'n (Lux.), 872 F.2d 1192,

1198-1200 (Sth Cir. 1989) (Federal Water Pollution Control

Act); Benefield v. Exxon Corp., 959 F.2d 805, 807 (9th Cir.

1992) (Trans-Alaska Pipeline Authorization Act).° Indeed.

this Court already has applied fundamental principles of

proximate causation to the ESA. See Sweet Home, 515 US.

687.

Sweet Home involved § 9 of the ESA. 16 U.S.C. § 1538,

which forbids the “knowing” “take” of an endangered or

threatened species. Although this provision does not ex-

pressly use the terms “cause” or “proximate cause,” the Court

* Cf Defenders of Wildlife, 450 F.3d at 404-05 (Berzon, J., concurring

in denial of rehearing en banc) (wrongly concluding that the ESA requires

a broader inquiry than NEPA).

* The presumption that statutes incorporate common-law principles of

proximate cause is especially appropriate in the environmental arena. be-

cause environmental law was born of the common-law tort of nuisance.

See Robert V. Percival et al.. Environmental Regulation: Law, Science,

and Policy 60-61 (4th ed. 2003). Nuisance doctrines long have contained

a proximate cause requirement. See. e.g.. Restatement (Sccond) of | orts

$ 822 (private nuisance): County of Westchester v. Town of Greenwich, 76

F.3d 42, 45 (2d Cir. 1996) (public nuisance).

easily found it to incorporate “ordinary requirements of proxi-

mate causation and foreseeability.”. 515 U.S. at 697 n.9 (in-

terpreting the phrases “knowingly violates” and “otherwise

violates” to incorporate proximate causation and foreseeabil-

ity); see also id. at 701 n.13 (same).

The concurring and dissenting Justices all agreed that the -

ESA incorporates foreseeability and proximate cause. See id.

at 712 (O’Connor, J., concurring) (“I see no indication that

Congress ... intended to dispense with ordinary principles of

proximate causation.”); id. (“In the absence of congressional

abrogation of traditional principles of causation, then, private

parties should be held liable ... only if their ... actions proxi-

mately cause [the prohibited results].”); id. at 732 (Scalia, J.,

dissenting) (“I quite agree that the statute contains” a proxi-

mate cause requirement, “because the verbs of purpose in

[§ 9] denote action directed at animals.”). In short, “[{ijn the

absence of congressional abrogation of traditional principles

of causation, then, private parties should be held liable [under

§ 9] only if their ... actions proximately cause death or injury

to protected animals.” /d. at 712 (O’Connor, J., concurring).

As the concurring opinion further explained. proximate

cause serves a critical function in limiting legal responsibility

within sensible and just boundaries. And that fundamental

purpose applies with full force to the ESA. Because “proxi-

mate causation ‘normally eliminates the bizarre,” the appli-

cation of proximate cause prevents the creation of duties and

the imposition of liability for “remote consequences” that this

Court has recognized to be beyond the ESA’s reach. /d. at

713 (O°Connor, J.. concurring) (citations omitted).

B. Section 7 Of The ESA Likewise Requires Proxi-

mate Cause.

1. The same bedrock principles of causation that Sweet

Home found in § 9 of the LSA apply to § 7 of that statute as

well. As in Sweet //ome,. nothing in the statute or regulation

indicates that the “ordinary” rule of proximate causation

should not apply to § 7. To the contrary, the text of § 7 dem-

onstrates that Congress affirmatively incorporated proximate

causation into the statute, just as it did in § 9.

There can be little doubt that the language of § 7 contains a

causation requirement. Section 7(a)(2) requires federal agen-

cies to

insure that any action authorized, funded, or carried out

by such agency ... is not likely to jeopardize the contin-

ued existence of any endangered species or threatened

species or result in the destruction or adverse modifica-

tion of habitat of such species.

16 U.S.C. § 1536(a)(2). Just as the term “harm” is defined as

“to cause hurt or damage to,” Sweet Home, 515 U.S. at 697

(emphasis added), the verb “jeopardize” at issue here means

“to cause (something) to be harmed or damaged.” Cambridge

Dictionary of American English 469 (2000) (emphasis

added); see also Sweet Home, 515 U.S. at 732 (Scalia, J., dis-

senting) (recognizing that “the verbs of purpose in [§ 9] de-

note action directed at animals,” and therefore implicate

proximate cause). What is more, the statutory phrase “result

in” is a synonym for “cause.” A “cause” leads to a “result,”

and an action that “results in” an effect is the cause of that

effect. See Roget's lJ: The New Thesaurus 831 (1988) (“re-

sult in” is a synonym for “[t]o be the cause of”): see also Na-

tional Wildlife Fed'n v. Hodel, 839 F.2d 694, 745 (Sth Cir.

1988) (“{t}he phrase ‘resulting from or incident to’ clearly

suggests a causal connection, which ... certainly does require

some type of limiting principle of proximate causation”).

Thus, nothing in the statute indicates that § 7 departs from

the “ordinary” rule of proximate cause — the basic text is to

the contrary. Indeed, additional statutory terms confirm the

existence of such a requirement. Under § 7, the “action

agency” must ensure that its conduct is “not likely to” cause

jeopardy or result in the destruction of habitat. 16 U.S.C.

§ 1536(ax(2). This language of “likelihood” is commonly

used to denote proximate cause. See, e.g., Brower v. County

ef Inyo, 489 U.S. 593, 599 (1989) (linking proximate causal-

ity to whether a result was “likely”); Waters-Pierce Oil Co. v.

Deselms, 212 U.S. 159, 179 (1909) (tying proximate cause to

the “likely ... result”).

2. The legislative history of § 7 further demonstrates that

Congress drafted the statute to ensure that agencies would not

be forced to evaluate and mitigate remote and speculative

harms. The statute originally commanded agencies to make

certain that their actions “do/] not jeopardize species.’ The

statute was amended in 1979 to reflect the current text, which

requires agencies to “insure” that their actions are “not /ikely

/o” jeopardize species. 16 U.S.C. § 1536(a)(2). The Confer-

ence Committee explained that Congress made this change

because

[a]s currently written ... the law could be interpreted to

force the [consulting agency] to issue negative biological

opinions whenever the action agency cannot guarantee

with certainty that the agency action will not jeopardize

the continued existence of the listed species or adversely

modify its critical habitat.

H.R. Conf. Rep. No. 96-697, at 12 (1979), reprinted in 1979

U.S.C.C.A.N. 2572, 2576. This statement plainly reveals

Congress’s intent that agencies review only the direct and

foreseeable impacts of their actions on species, and not en-

gage in purely hypothetical analyses of remote and specula-

tive chains of causation.

The pre-1979 version of siatute read:

All other Federal departments and agencies shall, in consultation with

and with the assistance of the Secretary, utilize their authorities in fur-

therance of the purposes of [this Act] by taking such acticns neces-

sary to insure that actions authorized, funded, or carried out by them

do nat jeopardize the continued existence of such endangered species

and threatened species or result in the destruction or modification of

[critical] habitat of such species ....

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

3. The implementing regulations are consistent with the

statute — as they must be — and incorporate the same custom-

ary standards of proximate causation and foreseeability. At

the threshold, they require each “action agency” to “review its

actions ... to determine whether any action may affect” listed

species or critical habitat. 50 C.F.R. § 402.14(a). If so, some

form of consultation is required. See supra at 3-4 (discussing

the consultation process). And, at each step along the way,

the regulations governing the consultation process sound in

(and perform the function of) proximate cause — viz., “to hold

the [inquiry] within some reasonable bounds.” Prosser &

Keeton § 44, at 302.

Thus, during consultation, the relevant Service must deter-

mine whether the action “is /ikely to jeopardize, 50 C.F.R.

§ 402.14(2)(4), or “likely to adversely affect,” id. § 402.13(a),

species or habitat (emphases added). As noted above, the lan-

guage of action and “likelihood” commonly are used to em-

brace proximate cause. In addition. the phrase “jeopardize

the continued existence of” is defined as “engag[ing] in an

action that reasonably would be expected, directly or indi-

rectly, to reduce appreciably the likelihood of both the sur-

vival and recovery of a listed species.” /d. § 402.02 (empha-

sis added). Again, this language of reasonable expectation

and reasonable likelihood invokes fundamental precepts of

proximate cause. See, e.g., Afetropolitan Edison Co., 460

U.S. at 774 (interpreting the statutory term “reasonably close

causal relationship” as invoking proximate cause”): Prosser

& Keeton § 41. at 263 (proximate cause requires a “reason-

able connection” between the act and the damage); id. § 43, at

300 (invoking a “reasonably close connection”).”

* Similar standards govern the informal consultation process. See 50

C.F.R. § 402.13. Specifically, “the consultation process ts terminated” tf

“the action is not /ikely to adversely affect listed species or critical habi-

tat.” /d § 402.13(a) (emphasis added).

Moreover, in conducting their analyses. the Services are

obliged to examine the “effects of the action” proposed, as

well as “cumulative effects.” 50 C.F.R. §§ 402.12(a),

402.14(2)(3). The “effects of the action” are defined as “di-

rect” effects and “indirect” effects. Jd. § 402.02.’ The phrase

“direct effects” obviously denotes proximate cause. See

Prosser & Keeton § 43, at 294 n.13 (“direct” is “a general

synonym for ‘proximate’”); Sweet Home, 515 U.S. at 732

(Scalia, J., dissenting) (“*[PJroximate’ causation simply

means direct causation.”), In addition, the regulations spe-

cifically define the terms “indirect” and “cumulative” effects

to embody notions of proximate causation. See 50 C.F.R.

§ 402.02 (defining “indirect effects” as “those that are caused

by the proposed action and are later in time, but still are rea-

sonably certain to occur” (emphasis added)); id. (defining

“cumulative effects” as “those effects of future State or pr-

vate activities ... that are reasonably certain to occur’); Inter-

agency Cooperation, 51 Fed. Reg. at 19,933 (excluding

“speculative actions” from “the ‘cumulative effects’ analy-

sis’). Indeed. this Court held in Sweet Home that “indirect”

effects, 515 U.S. at 697-98, incorporate principles of proxi-

mate cause, id. at 696 n.9, 700 n.13."°

” The “effects of the action” also include “effects of other activities that

are interrelated or interdependent with that action.” 50 C.F.R. § 402.02.

Contrary to the court’s sua sponte analysis below, 420 F.3d at 972-73,

“interrelated” and “interdependent” actions are not at issue here, because

any future development is not “part of a larger action” (the transfer of au-

thority to Arizona); does not “depend on the larger action for [its] justifi-

cation”; and does not lack “independent utility apart from the action under

consideration.” 50 C.F.R. § 402.02. Tellingly, in quoting the regulation

the opinion below omitted much of this critical limiting language.

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

NAHB Pet. App. 112. But this statement, unsupponed by any citation, is

contrary to the statute and regulations. Even if it were not. FWS cannot be

referring to “but for” causation as typically understood, given that the

same paragraph of the BiOp equates but-for causation with the “substan-

tial factor” test’ which is an alternative standard altogether. /d: see

Prosser & Keeton § 4), at 265-68.

Il. THE DECISION BELOW IMPROPERLY ABAN-

DONED TRADITIONAL CONCEPTS OF PROXI-

MATE CAUSATION AND EMPLOYED AN EX-

TREME VERSION OF BUT-FOR CAUSATION.

The Ninth Circuit’s decision abandoned the bedrock princi-

ple of proximate cause. Rejecting the argument that “it is pri-

vate development, not the EPA’s transfer decision, that would

cause any impact on listed species,” the panel adopted a “but

for” causation standard, observing that “[e]vents can be

caused by several actions in a ‘but-for’ causal chain.” De-

fenders of Wildlife, 420 F.3d at 962 (emphasis added). The

court offered no real explanation for this departure from basic

causation principles, but instead stated simply that:

Obviously, without private decisions to construct new

developments, there will be no Clean Water Act con-

struction permits and no impact from the issuance of

such permits on listed species or their habitats. Just as

obviously, without the transfer of permitting authority

from the federal to the state government, developers

could be required, as they were before the transfer deci-

sion, to mitigate any impact from their development de-

cision.... The Biological Opinion’s determination to the

contrary disregards the obvious cause analysis ....

Id. at 961-62.

The panel below did not purport to hold that the transfer of

permitting authority was a proxima‘e cause of jeopardy to

species — and properly so. The chain of events that purport-

edly links the transfer of permitting authority to the hypothe-

sized jeopardy entails precisely the type of “remote conse-

quences,” Southern Pac. Co., 245 US. at 533-34, and “ripples

of harm.” Associated Gen. Contractors of Cal.. 459 U.S. at

534. that are the antithesis of proximate cause.

Specifically. before jeopardy to species could occur here.

the following lengthy chain of intervening events would have

to occur:

1) EPA transfers NPDES permitting authority to the

State of Arizona;

2) Arizona establishes conditions for issuing CWA

permits that provide no meaningful substitute for

federal ESA consultation;

3) A developer proposes to construct a development;

4) The developer determines whether the development

requires an NPDES permit and, if so, applies for it;

5) Arizona determines whether to grant the NPDES

permit to the developer, and grants it:

6) The developer acquires any federal permits required

to construct the development — for example, a

dredge-and-fill permit under CWA § 404, which is

not delegated to the State and which may itself trig-

ger ESA consultation;

7) The developer acquires all of the other state, local,

and financial approvals required to construct the de-

velopment;

8) The developer constructs the development and ~ ig-

noring the ESA § 9 prohibition against taking spe-

cies — harms a species of concern.

This causal chain is far too remote and attenuated to satisfy

any notion of proximate cause. See Metropolitan Edison, 460

U.S. at 774 (“Some effects that are “caused by’ a change in

the physical environment in the sense of ‘but for’ causation,

will nonetheless not fall within [NEPA] § 102 because the

causal chain is too attenuated.”): Restatement (Second) of

Torts § 433(a) (causation is determined, in part, with refer-

ence to “the number of other factors which contribute in pro-

ducing the harm”). Simply put. “Congress did not intend that

Federal actions be precluded by such speculative actions.”

Interagency Cooperation, 51 Fed. Reg. at 19,933."'

First, the “agency action” itself will not proximately cause

any harm to species. Far from it: All that is at issue here is

“an administrative transfer of authority” that “will not cause

development.” NAHB Pet. App. 113 (BiOp); id. at 114-17

(observing that jeopardy or habitat alteration is not a natural

or inevitable byproduct of the transfer of authority).'” The

transfer does not “authorize” a single development; it does

nothing more than change the conditions under which devel-

opment might occur. /d. at 80.

That is not enough to establish causation. Causation turns

on whether the defendant’s conduct has “created a force or

series of forces which are in continuous and active operation

up to the time of the harm,” and it ts not enough simply to

“create|] a situation harmless unless acted upon by other

forces for which the actor is not responsible.” Restatement

(Second) of Torts § 433(b). Here, this basic requirement is

not met. The transfer of permitting authority from EPA to the

State of Arizona does not set in motion “forces [that] are in

continuous and active operation up to the time of” jeopardy to

species. It simply establishes a condition under which, if a

'' Indeed, this causal chain is so attenuated that it raises serious ques-

tions about Respondents’ standing. See Lujun v. Defenders of Wildlife.

504 U.S. 555, 562 (1992) (standing requires a showing of causation). As

the D.C. Circuit recognized in the NEPA context, “[sJuch a protracted

chain of causation fails [to provide standing] both because of the uncer-

tainty of several individual links and because of the number of speculative

links that must hold for the chain to connect the challenged acts to the

asserted particularized injury.” Florida Audubon Soc'v v. Bentsen, 94

F.3d 658, 670 (D.C. Cir. 1996) (en banc).

* See also Biological Evaluation for Endangered Species Act Consulta-

tion on USEPA’s Proposed Approvai of the State of Arizona's NPDES

Program (June 21. 2002) (“Biological Evaluation”) (NAHB Pet. App. 615,

617) (proposed action ts “an administrative shift of authority and is not

associated with any physical action that will alter habitat or affect biota”).

variety of other circumstances come to pass, effects on spe-

cies someday may result.

Second, a variety of complicating and intervening factors

further attenuate causation. At bottom, the Ninth Circuit’s

concern was that a permit issued by Arizona under the trans-

ferred authority might allow private development. However,

“{djevelopments are driven by any number of factors, includ-

ing but not limited to demand, supply, economics, political

decisions, zoning regulations, and financial market stability.”

NAHB Pet App. 113 (BiOp). This Court has rejected causal

chains far less tenuous than this one. In Holmes, for instance,

the Court rejected a RICO claim as too “remote,” reasoning

that “the less direct an injury is, the more difficult it becomes

to ascertain the [injury] attributable to the violation, as dis-

tinct from other, independent, factors.” 503 U.S. at 269.

Here, the presence of such independent causal factors would

require even more speculation than the Court declined to ap-

prove in Holmes: “EPA’s CWA-mandated approval of the

program has only an attenuated causal link to the reduction in

Federal ESA conservation responsibilities.” NAHB Pet. App.

117 (BiOp); accord Anza, 126 S. Ct. at 1° (no proximate

cause when a court would have to engage in a “speculative”

inquiry); Southern Pac. Co., 245 U.S. at 533 (“The general

tendency of the law. in regard to damages at least. is not to go

bevond the first step.”).

Third, the State of Arizona is an intervening independent

actor, displacing the EPA as the principal “authorizer” of any

development. “|T]he common law is clear that certain inter-

vening events — otherwise called *superceding causes’ — are

sufficient to sever the causal nexus and cut off all liability.”

Archer vy. Warner, 538 U.S. 314, 326 (2003): Restatement

(Second) of Torts §452(2) ("Where ... the duty to prevent

harm to another ... is found to have shifted from the actor to a

third person, the failure of the third person to prevent such

harm is a superseding cause.”). One such “intervening event”

is independent action by another entity. See. e.g. Siggers v.

Barlow, 906 F.2d 241, 243-47 (6th Cir. 1990); cf Bennett v.

Spear, 520 U.S. at 167 (for there to be standing, the alleged

injury “must be fairly traceable to the challenged action of the

defendant, and not the result of some independent action of

some third party not before the court”). Here, Arizona makes

the ultimate decision whether to issue a particular permit, and

thus is a superceding cause.

Fourth, if development is authorized by an Arizona water

discharge permit, and if it does occur, the Ninth Circuit's hy-

pothesized chain of causation further assumes that no other

protections for species exist. This is simply wrong. Ari-

zona’s individual permitting decisions will be made in light of

the numerous state and local laws that protect endangered and

threatened species.'’ Indeed, it was due in part to the exis-

tence of such laws that the Biological Evaluation concluded

“that any potential adverse effects to Federally-listed species .

or critical habitat would be insignificant and/or discountable.”

NAHB Pet. App. 615-16.

Moreover, numerous “federal species-protective mecha-

nisms make it speculative whether jeopardy to species will

ultimately result. FWS took these protections into account.

See NAHB Pet. App. 101-11 (BiOp). For instance, if the de-

velopment requires a permit from some other federal

agency for example. a dredge-and-fill permit — ESA consul-

tation still may be required. In addition, ESA § 9 imposes

civil and criminal penalties for “tak|ing]” any listed species or

destroying critical habitat.” 16 U.S.C. § 1538: see NAHB

‘In Arizona, “a Sonoran Desert Multi-Species Conservation Plan is

currently being drafted to protect the species of greatest concern including

a cactus ferruginous pygmy-owl and Pima pincapple cactus.” NAHB Pet

App. !15 (BiOp). Arizona law prohibits the taking of native plants trom

any land within the State without following certain procedures. Ariz. Rev.

Stat. $ 3-904. In fact, the BiOp noted that Arizona’s administration of the

permitting program “[wlould provide significant environmental benefits”

because Arizona has substantially more staff than EPA in the relevant

offices. NAHB Pet. App. 82-83.

Pet. App. 105-06, 112 (BiOp). The prospect that that provi-

sion will be violated is purely speculative, and such a viola-

tion would in any event break the chain of causation. See

Glass Packaging Inst. v. Regan, 737 F.2d 1083, 1091 (D.C.

Cir. 1984) (rejecting the argument that “consideration of envi-

ronmental effects caused by reasonably foreseeable criminal

acts of third parties” must be considered), overruled in part

on other grounds as explained in Hazardous Waste Treatment

Council v. EPA, 861 F.2d 277, 283 n.2 (D.C. Cir. 1988);

Loggerhead Turtle v. County Council, 92 F. Supp. 2d 1296,

1307, 1308 (M.D. Fla. 2000); see also Strahan v. Coxe, 127

F.3d 155, 164 (1st Cir. 1997) (issuance of a license that can

be used “in a manner consistent with both state and federal

law” is not a “cause” of illegal conduct resulting from misuse

of that license). ESA § 10 provides an additional mechanism

to minimize jeopardy to protected species, in the form of “in-

cidental take” permits — and as the BiOp recognized, the pos-

sibility that such permits would not be obtained is “specula-

tive.” NAHB Pet. App. 114-15."

Furthermore, the ESA holds no monopoly over species pro-

tection. The CWA affords “substantive ... protections ... to

Federally-listed species and critical habitat under the [EPA]

permit program,” and those protections “will continue under

the [Arizona] permit program.” /d at 616 (Biological

Evaluation). And the Biological Opinion enumerated a vari-

ety of ways in which EPA and FWS would superintend Ari-

zona permitting decisions in order to protect species. /d. at

101-05.

The court below discounted §§ 9 and 10 on the theory that they are

not perfect “substitutes for section 7 coverage.” 420 F.2d at 975. Even if

true, these provisions’ protective effect attenuates the causation between a

transfer of permitting authority and the possibility of jeopardy to species.

indeed, the court properly conceded that $$ 9 and 10 are “important provi-

sions,” and discounted them only by asserting that “there is no indication

{in the record] that section 9 is or will be enforced meaningfully.” /d at

975. This is a federal statute backed by civil and criminal penalties, and

so its deterrent effect should be plain

Fifth, this remote and hypothetical causal chain is broken

because the purview of the permitting program at issue here is

water quality, and the species of concern in this case — the

Pima pineapple tactus, as well as the now-delisted pygmy

owl'® — are not asserted to be affected by water quality.

Rather, the species were thought to be potentially subject to

“non-water quality related impacts.” NAHB Pet. App. 562

(Elevation Document) (emphasis added).'® This is not

enough. See Natural Res. Def. Council, Inc. v. EPA, 822

F.2d 104, 128-31 (D.C. Cir. 1987) (EPA’s CWA authority

over discharge permits does not create jurisdiction over land-

based construction). Put another way, even assuming that a

transfer of permitting authority could be a cause of jeopardy

to species, it would only be through water-quality-related im-

pacts — and here, there would be no such impacts. Accord-

ingly, transferring the wastewater discharge permitting proc-

'* Although the Arizona branch of the FWS initially identified two spe-

cies as being affected by the permitting transfer program, NAHB Pet.

App. 562, 563, one of those species — the pygmy owl - is no longer on the

endangered or threatened species list. Final Rule to Remove the Arizona

Distinct Population Segment of the Cactus Ferruginous Pygmy-ow| From

the Federal List of Endangered and Threatened Wildlife, 71 Fed. Reg.

19,452 (Apr. 14, 2006).

semi-desert grassland and Sonoran desertscrub in southern Arizona and

northern Mexico.” See Arizona Ecological Servs. Field Office, FWS,

Pima Pineapple Cactus, at Witp://www.fws.gov/southwesves/arizona’

Documents/Redbook/Pima®o20Pineapple®e20cactus*e20RB.pdf (June

2000); see also generally http://www .fws.gov southwest es/arizona/pima.

htm (last visited Feb. 19, 2007). The pygmy owl is also a desert upland

species, “found primarily in Sonoran desert scrub vegetation with some

locations in riparian drainages and semi-desert grassland vegetation com-

munities.” See Arizona Ecological Servs. Field Office, FWS, Cactus Fer-

ruginous Pygmy-Owl, at http: www .ftws.gov/southwest es/arizona’

Documents’ Redbook Cactus®o20F erruginous® o20Py emy?o20ow lh,

pdf (Jan. 2003); see also generally http: www.fws.gov southwest es

Arizona Documents PublicReview CFPO FINAL REV PROTOCOL pdt

(Jan. 2000),

ess from EPA to Arizona cannot be considered a “cause” of

the harm contemplated by Respondents.

* * * #

Proximate causation is a fundamental principle throughout

the law. This Court has recognized its role in § 9 of the ESA,

and it likewise is the rule in § 7 of the statute. The Ninth Cir-

cuit’s contrary conclusion was mistaken. And its finding of a

causal relationship on a highly attenuated theory of but-for

causation does not satisfy proximate cause, because the per-

mitting decision is remote from any theoretical jeopardy to

species, and because of the numerous intervening and super-

ceding causes.

CONCLUSION

The decision of the Ninth Circuit should be reversed.

Respectfully submitted,

CARTER G. PHILLIPS

STEPHEN M. NICKELSBURG*

Eric A. SHUMSKY

R. JUGE GREGG

BRIAN E. NELSON

SIDLEY AUSTIN LLP

1501 K Street, N.W.

Washington, D.C. 20005

(202) 736-8000

Counsel for Amici Curiae

February 20, 2007 *Counsel of Record

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.