Petition for Writ of Certiorari — Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 139 S. Ct. 45 (2018) (No. 17-71)
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MUL 11 20i7
. . THE CLERK
WS. J
Jn the Supreme Court of the Anited States
17-21 FILED
WEYERHAEUSER COMPANY,
Petitioner,
Vv.
UNITED STATES FISH AND WILDLIFE SERVICE, ET AL.,
Respondents.
Petition for a Writ of Certiorari to the
United States Court of Appeals
for the Fifth Circuit
PETITION FOR A WRIT OF CERTIORARI
RICHARD C. STANLEY TIMOTHY S. BISHOP
Stanley, Reuter, Ross, Counsel of Record
Thornton & Alford, LLC CHAD M. CLAMAGE
909 Poydras Street, Suite Mayer Brown LLP
2500 71 South Wacker Drive
New Orleans, LA 70112 Chicago, Illinois 60606
(504) 523-1580 (312) 782-0600
tbishop@mayerbrown.com
JAMES R. JOHNSTON
ZACHARY R. HIATT
Weyerhaeuser Company
220 Occidental Ave. S.
Seattle, Washington 98104
(206) 539-4361
Counsel for Petitioner
QUESTIONS PRESENTED
Congress enacted the Endangered Species Act to
conserve “ecosystems upon which endangered species
** * depend.” 16 U.S.C. § 1531(b). To that end, the Act
requires the Secretary of the Interior to “designate any
habitat of such species which is then considered to be
critical habitat.” Id. § 1533(a)(3)(A). “Critical habitat”
may include areas “occupied by the species,” as well as
“areas outside the geographical area occupied by the
species” that are determined to be “essential for the
conservation of the species.” Jd. § 1532(5)(A).
The Fish and Wildlife Service designated as critical
habitat of the endangered dusky gopher frog a 1500-
acre tract of private land that concededly contains no
dusky gopher frogs and cannot provide habitat for
them absent a radical change in land use because it
lacks features necessary for their survival. The Service
concluded that this designation could cost $34 million
in lost development value of the tract. But it found that
this cost is not disproportionate to “biological” benefits
of designation and so refused to exclude the tract from
designation under 16 U.S.C. § 1533(b)(2).
A divided Fifth Circuit panel upheld the designa-
tion. The questions presented, which six judges of the
court of appeals and fifteen States urged warrant
further review because of their great importance, are:
1. Whether the Endangered Species Act prohibits
designation of private land as unoccupied critical
habitat that is neither habitat nor essential to species
conservation.
2. Whether an agency decision not to exclude an
area from critical habitat because of the economic
impact of designation is subject to judicial review.
li
PARTIES TO THE PROCEEDINGS BELOW
In addition to petitioner Weyerhaeuser Company,
plaintiffs-appellants below, respondents here, are
Markle Interests, LLC, P&F Lumber Company 2000,
LLC, and PF Monroe Properties, LLC, which are filing
a separate petition for certiorari.
Defendants-appellees below, the federal agency
respondents here, are the United States Fish and
Wildlife Service; and, by operation of Rule 35.3, Greg
Sheehan, in his official capacity as Acting Director of
the United States Fish and Wildlife Service, and Ryan
Zinke, in his official capacity as Secretary of the
Department of Interior.
Intervenor-defendants-appellees below, and
respondents here, are the Center for Biological
Diversity and Gulf Restoration Network.
CORPORATE DISCLOSURE STATEMENT
Petitioner Weyerhaeuser Company is a publicly
held company. It has no parent corporation and no
publicly held company owns 10% or more of its stock.
il
TABLE OF CONTENTS
Questions Presented ......... iceman Paihia tacenesion lalate i
Parties to the Proceedings ae Sat Tet Rafe UE eee. il
Corporate Disclosure Statement ............................... il
a a aisinde cirn ania Gapinds salianeteens 1
lease 1
Statutes and iedattnes ME 2 Ae AEE GATOR AR 1
ace caabineiviiipannnnebsiniaious 2
A. The Statutory And Regulatory Scheme...........5
B. The ESA’s Critical Habitat Provisions ............ 6
C. FWS’s Designation Of Unoccupied
Critical Habitat For The Dusky Gopher
| BRENT ag RE a SE oN APES Be ai Cou eiraniet 9
D. The District Court Distdien AS PR ASE BSS LMR SE SE 12
E. The Fifth Circuit’s Divided Panel
Decision And En Banc Vote .................0..0...... 13
Reasons For Granting The Petition.......................... 14
I. The Fifth Circuit Misinterpreted The ESA’s
Critical Habitat Provisions. .........................0000.008 14
A. The ESA Prohibits Designation Of Unit
EEE CE 15
B. The Fifth Circuit’s Ruling Conflicts
With Decisions Of The Ninth Circuit. ........... 24
Il. The Meaning Of “Critical Habitat” Is Of
Immense And Immediate Public
EE te FS RES BES a 26
A. The Panel’s Ruling Inflicts Significant
Costs On Private Landowners, With No
Benefits To Endangered Species.................... 26
iV
B. FWS’s New Rule Formalizing Its
Authority To Designate Unoccupied
Non-Habitat Reinforces The Need For
I a ncapsomseebesunensecses 30
Ill. The Panel’s Erroneous Holding That FWS’s
Decision Not To Exclude Unit 1 From
Designation Is Judicially Unreviewable
“Play[s] Havoc With Administrative Law’ ......... 31
ERT ae oS Rl Date! PT EI RE cee peer 33
Appendix A — Opinion of the court of appeals
Cee sd ces ocaliinues la
Appendix B — Opinion of the district court
a Js inaespdiseseennie 78a
Appendix C — Order denying rehearing
ee cc nisuesescotuden 123a
Appendix D — Statutes Involved ......................... 163a
Appendix E — Regulations Involved.................... 166a
Vv
TABLE OF AUTHORITIES
Page(s)
Cases
All. for Wild Rockies v. Lyder,
728 F.Supp.2d 1126 (D. Mont. 2010)................... 25
Am. Forest Res. Council v. Ashe,
946 F. Supp. 2d 1 (D.D.C. 2013), affd,
601 F. App’x 1 (D.C. Cir. 2015)....0..ccccccccececeeeeseee. 25
Arizona Cattle Growers’ Ass'n v. Salazar,
606 F.3d 1160 (9th Cir. 2010)........0..0000.000000c. 4, 24
Babbitt v. Sweet Home Chapter of
Communities for a Great Oregon,
a ccevisvenesersonmaaed 6, 20
Bennett v. Spear,
ES BD WII avin cn atiaionesuceosenés 5, 6, 14, 32, 33
Cape Hatteras Access Pres. All. vy. U.S. Dep't
of Interior,
344 F. Supp.2d 108 (D.D.C. 2004) 2.000... 00 cn... 25
Chevron, U.S.A., Inc. v. N.R.D.C.,
ee nincranasemeansiial 18
Clark v. Martinez,
i i is ceawsspeoduseny 21
Ctr. for Biological Diversity v. Kelly,
93 F.Supp.3d 1193 (D. Idaho 2015)..................... 25
vl
Esquivel-Quintana v. Sessions,
Ao Fy OMCs eA 18
Home Builders Ass'n of N. Cal. v. U.S. Fish
& Wildlife Services,
616 F.3d GBS (th Cir. BOIO).................cccccccceseesses 24
Mach Mining, LLC v. EEOC,
oe se Rare cask RE AT: 32
Motor Vehicle Mfrs. Ass’n v. State Farm
Mut. Auto. Ins. Co.,
Se ee i hic pnsttvtevinstcnncbancaharees EERE © 32, 33
Nat'l Ass’n of Home Builders v. Babbitt,
ft fe fg heat RR T 22
Nat'l Ass'n of Home Builders v. Defenders of
Wildlife,
Ee Wee NO Ce Piireesectevcinsessminceeraicanenee 6, 18
Nat Fed. of Indep. Business v. Sebelius,
BE CF i crticsintsiscvesicesnkiasddimauanmaaiaee 22
Rapanos v. United States,
Oe SF as Fe i ctnientersxnsessscescseiacabienmiel 4, 22, 23
Solid Waste Agency of N. Cook Cty. v. Army
Corps,
8s | Rene ner, 5, 21, 22, 23
Tenn. Valley Auth. v. Hill,
FF a, Be i iccrcivcpeevsccenestctassincdhaaeeee 6, 7
Util. Air Regulatory Grp. v. EPA,
et Bi ef np ee mes 20
Vl
Statutes, Rules, and Regulations
I I noc ccccecsccscececsescocecsensee 18
16 U.S.C.
Si SE a ae 1
§ 1531(c)(2) eens. Tae 23
a 7,17
Nee cmcmavesereeoms 17
a 3,8
§ 1532(5)(C) ............... oe 7, 19
a Es 20
ES a
a cssietepeseneocsoudad 20
once sccceeveesesersesecss aero A a See 7
ao scuseoccmmnes 3, 15
Se 11, 32
<a 20
Sa 19, 20
Rg SSE caDSR EE 20
gs aecesanendes 20
EE a 20
i caducedene 5, 19
ac stteeuneenéusonoomota 6
re . ssascuseunanmnctmens 6
na. csessacepeceamencovens 6
Ee l
Se _csturhutsecusonsones 6
50 C.F.R.
EERE RE RC 2, 30
ee x
a ON Bae $
vill
62 Fed. Reg. 39129 (July 22, 1997) .......0..0cccccceceeeeees 28
68 Fed. Reg. 46684 (Aug. 6, 2003) .......0..0...0c0c0000--0--- 28
75 Fed. Reg. 31387 (June 3, 2010) .............cccccceceeeeee: 10
76 Fed. Reg. 59774 (Sept. 27, 2011) ............0...... 10, 20
77 Fed. Reg. 35118 (June 12, 2012).........00....... passim
81 Fed. Reg. 7414 (Feb.11, 2016).................... 8, 30, 31
Miscellaneous
AMERICAN HERITAGE DICTIONARY OF THE
ENGLISH LANGUAGE (1981) ........................00.. 16, 19
Sheila Baynes, Cost Consideration and the
Endangered Species Act, N.Y.U. L. REV.
RG aa SE Ret ate ARE Ds ITE at SS EB 29
BLACK’S LAW DICTIONARY (5th ed. 1979) ......... seskines 17
Harry T. Edwards, et al., FEDERAL
STANDARDS OF REVIEW 78-81 (2d ed.
eT RI RR A cet Se ty ee Pe 33
H.R. Rep. No. 95-1625 (1978), reprinted in
1978 U.8.C.C.A.N. O4BGB................0..00c00000 4, 7, 8, 21
IEC, Economic Analysis of Critical Habitat
Designation for the Dusky Gopher Frog
Sy ME aiaciocecnkihodieteadedaieidadsusiedtaansaiseudinn 11, 23
1X
Norman D. James & Thomas J. Ward,
Critical Habitat’s Limited Role Under
the Endangered Species Act and Its
Improper Transformation into “Recovery”
Habitat, 35 J. ENVTL. L. 1 (2016).........0.000000000000.... 6
Joe Kerkvliet and Christian Langpap,
Learning from Endangered and
Threatened Species Recovery Programs:
A Case Siudy Using U.S. Endangered
Species Act Recovery Scores, 63 ECOL.
Ne ha ditniccissncdenciassedtnitinaanssedaionciioubiis 28
Dean Lueck and Jeffrey A. Michael},
Preemptive Habitat Destruction Under
the Endangered Species Act, 46 J.L. &
I i cei 28
OXFORD ENGLISH DICTIONARY (2d ed. 1989)........... 19
RANDOM HOUSE DICTIONARY OF THE
ENGLISH LANGUAGE
Rs CUI, I oo ces cuccccsonecocncceies 16, 18, 19
St. Tammany Parish Council, Res. Council
Ser. No. C-3274 (Nov. 3, 2011) .00.0..000000000000000000. 11
S. Comm. on Env’'t & Pub. Works, 97th
Cong., A LEGISLATIVE HISTORY OF THE
ENDANGERED SPECIES ACT OF 1973, AS
AMENDED IN 1976, 1977, 1978, 1979, AND
1980 (COMM. PRINT 1982)...........0.00....0000-0 cece eee. 8, 21
Stephen M. Shapiro, et al., SUPREME COURT
PRACTICE (BGG OG, BOUT) qn... .........ccccccccecccccscccoscess 16
x
Andrew J. Turner and Kerry L. McGrath, A
Wider View of the Impacts of Critical
Habitat Designation, 43 ENVTL. L.
I, A EE CEO 26
WEBSTER’S THIRD NEW INTERNATIONAL
I eo saninipinenmennsintl
Jeffrey E. Zabel and Robert W. Paterson,
The Effects of Critical Habitat
Designation on Housing Supply: An
Analysis of California Housing
Construction Activity, 46 J. REG’L SCI. 67
PETITION FOR A WRIT OF CERTIORARI
Petitioner Weyerhaeuser Company respectfully
petitions for a writ of certiorari to review the judgment
of the U.S. Court of Appeals for the Fifth Circuit.
OPINIONS BELOW
The decision of the court of appeals (Pet. App. la-
77a) is reported at 827 F.3d 452. The court of appeals’
denial of rehearing en banc and opinion of six
dissenting judges (Pet. App. 123a-162a) is reported at
848 F.3d 635. The decision of the district court (Pet.
App. 78a-122a) is reported at 40 F.Supp.3d 744.
JURISDICTION
The judgment of the district court granting in
relevant part the defendants’ motions for summary
judgment was entered on August 22, 2014. RE100,
Dkt. 130.! Weyerhaeuser Company (“Weyerhaeuser”)
timely appealed. RE49-50, Dkt. 133. The judgment of
the court of appeals was entered on June 30, 2016. The
court of appeals’ order denying the petition for
rehearing en banc was entered on February 13, 2017.
Justice Thomas extended the time to file a petition for
certiorari to July 13, 2017. No. 16A916 (Mar. 27 &
June 9, 2017). Jurisdiction rests on 28 U.S.C.
§ 1254(1).
STATUTES AND REGULATIONS INVOLVED
Relevant portions of the Endangered Species Act,
16 U.S.C. §§ 1531 et seq. (“ESA”), are reproduced at
Pet. App. 163a-165a. U.S. Fish and Wildlife Service
(“FWS”) regulations describing the “criteria for
! The Record Excerpts of the Appellants filed in the Court of
Appeals are cited as “RE.”
2
designating critical habitat” that applied in this case
appear at 50 C.F.R. § 424.12 (2011) and are reproduced
at Pet. App. 166a-169a. The final designation of critical
habitat for the dusky gopher frog is published at 77
Fed. Reg. 35118 (June 12, 2012).
STATEMENT
The endangered dusky gopher frog, it is
undisputed, needs three things for its habitat. 77 Fed.
Reg. at 35131.
First, for breeding, it needs small isolated,
ephemeral ponds embedded in open canopy forest.
Second, it needs upland, open canopy forest close to
its breeding ponds to serve as non-breeding habitat.
This forest needs to be “maintained by fires frequent
enough to support an open canopy and abundant
herbaceous ground cover.” [bid.
Third, the frog needs upland habitat connecting its
breeding and non-breeding grounds to allow movement
between them. This too must have “an open canopy”
and the “abundant native herbaceous species” of
groundcover produced by frequent fires. [bid.
These three “primary constituent elements”
(“PCEs”) of frog habitat are each essential to “support
the life-history processes of the species.” Ibid. If one is
missing, the frog will not survive.
Respondent FWS designated as critical habitat for
the dusky gopher frog areas of Mississippi occupied by
the frog and other areas that the frog does not occupy
but which have each of these three features. In
addition—and at issue here—FWS designated 1544
acres of private forestry land in Louisiana. I/d. at
35135.
There is no dispute that this Louisiana property
(“Unit 1”) is not occupied by the frog. Ibid. (“the last
3
observation of a dusky gopher frog in Louisiana was in
1965”). There also is no dispute that Unit 1 has at best
one of the features necessary for frog habitat—
ephemeral ponds. FWS recognized that “uplands
associated with thfose] ponds do not currently contain
the essential physical or biological features of critical
habitat.” Jbid. To the contrary, Unit 1 contains a
“closed-canopy forest” of loblolly pines that is
“unsuitable as habitat for dusky gopher frogs.” Jd. at
35129. And Unit 1’s management does not “includ[e
the] frequent fires” necessary to “support a diverse
ground cover of herbaceous plants” in “the uplands and
in the breeding ponds.” [bid. In other words, “Unit 1 is
uninhabitable” by the frog barring a radical change in
the Jand’s use by its private owners. Pet. App. 129a; see
77 Fed. Reg. at 35132.
The problem with FWS’s designation of Unit 1 as
critical habitat for the dusky gopher frog is that the
ESA does not authorize it. That is so for two indep-
endent reasons. First, the only land FWS is statutorily
authorized to designate is “any habitat of [an
endangered species] which is then considered to be
critical habitat.” 16 U.S.C. § 1533(a)(3)(A)(i) (emphasis
added). As six dissenters from denial of en banc review
explained, that plain statutory language means that
“[w]hatever is ‘critical habitat’ * * * must first be ‘any
habitat of such species” —that is, it must be “a place
where the species” could “naturally live or grow.” Pet.
App. 132a, 142a. Unit 1 does not fit that description.
Second, areas not occupied by the endangered
species, like Unit 1, may be designated as critical
habitat only if “such areas are essential for the
conservation of the species.” 16 U.S.C. § 1532(5)(A)(ii)
(emphasis added). There is no plausible reading of that
phrase that includes areas that are uninhabitable by
the species. The Fifth Circuit’s ruling offends that
A
plain statutory language and perversely makes it
easier to designate unoccupied areas than occupied
areas, in conflict with decisions of other circuits and
Congress's intent. See, e.g., Arizona Cattle Growers’
Ass'n v. Salazar, 606 F.3d 1160, 1163 (9th Cir. 2010)
(the ESA “impos[es] a more onerous procedure on the
designation of unoccupied areas”); H.R. Rep. No. 95-
1625, at 18 (1978), reprinted in 1978 U.S.C.C.A.N.
9453, 9468 (FWS “should be exceedingly circumspect in
the designation of critical habitat outside of the
presently occupied area of the species’).
The cost of FWS’s vast expansion of federal power
over private land is enormous. If the ponds on Unit |
are jurisdictional under the Clean Water Act (““CWA’),
any proposed change in the use of the land that
requires a CWA permit will trigger an ESA Section 7
consultation with FWS. 77 Fed. Reg. 35140-35141.
That means that any CWA permit would be
conditioned on the landowners complying with FWS
demands to create a preserve for the frog—or would be
denied altogether if “the Service recommends that no
development occur within the unit.” /d. at 35141.
FWS’s own economic analysis estimated that the
resulting lost development opportunities could cost the
landowners $34 million. Jd. at 35141. Multiplied for
the 2000+ animals and plants listed as endangered or
threatened, FWS’s expansion of its powers imposes a
multi-billion dollar drain on our economy.
FWS’s misinterpretation of the ESA undermines
our federal system of government. It substitutes
federal agency authority over vast tracts of private
land for the “quintessential state and local power” over
“[rlegulation of land use.” Rapanos v. United States,
547 U.S. 715, 738 (2006). No “clear and manifest’
statement from Congress” authorizes that “unprec-
edented intrusion into traditional state authority.”
5
Ibid. That is why fifteen States, including Louisiana,
urged en banc review in this case to “protec[t] the
private property rights of citizens and the sovereign
interests of the States.” Br. Am. Curiae of Alabama, et
al., in Support of Rhg. En Banc, at 1 (Aug. 9, 2016).
FWS’s interpretation furthermore “invokes the outer
limits of Congress’ power” over interstate commerce.
Solid Waste Agency of N. Cook Cty. v. Army Corps, 531
U.S. 159, 172 (2001) (““SWANCC’”). This Court reads
“statute[s] as written to avoid [such] significant
constitutional and federalism questions’—which here
calls for rejection of FWS’s expansive interpretation of
its powers. Jd. at 174.
The en banc dissenters recognized “the importance
of further review” of the Fifth Circuit's erroneous
decision, which garnered only bare panel and full court
majorities. Pet. App. 162a. This Court should intervene
now to ensure that the majoritys “non-textual
interpretations” of the ESA do not abrogate “Congress's
efforts to prescribe limits on the designation of [critical
habitat].” Ibid.
A. The Statutory and Regulatory Scheme
ESA Section 4, 16 U.S.C. § 1533(a), “requires the
Secretary of the Interior to promulgate regulations
listing those species of animals that are ‘threatened’ or
‘endangered’ under specified criteria, and to designate
their ‘critical habitat.” Bennett v. Spear, 520 U.S. 154,
157-158 (1997). Section 7, 16 U.S.C. § 1536(a)(2),
“further requires each federal agency to ‘insure that
any action authorized, funded, or carried out by such
agency” is not likely to “result in the destruction or
adverse modification of [critical] habitat.” Id. at 158.
If an agency finds that proposed federal action may
have an adverse effect on critical habitat, “it must
engage in formal consultation with [FWS],” which then
6
“provide[s] the agency with a written statement (the
Biological Opinion) explaining how the proposed action
will affect the species or its habitat” and outlining
“reasonable and prudent alternatives” to “avoid that
consequence.” Bennett, 520 U.S. at 158; see 16 U.S.C.
§ 1536(a)(3), (b)(3)-(4). “Following the issuance of a
‘jeopardy’ opinion, the agency must either terminate
the action, implement the proposed alternative, or seek
an exemption from the Cabinet-level Endangered
Species Committee.” Natl Ass'n of Home Builders v.
Def. of Wildlife, 551 U.S. 644, 652 (2007).
The Section 7 consultation requirement means that
federal agencies must “ensure that none of their
activities, including the granting of licenses and
permits,” adversely affect critical habitat. Babbitt v.
Sweet Home Chapter of Communities for a Great
Oregon, 515 U.S. 687, 692 (1995). Accordingly, the
Act’s requirements apply to any proposed use of private
land for which a federal permit is required, such as a
permit to discharge fill material into wetlands under
Section 404 of the CWA, 33 U.S.C. § 1344.
B. The ESA’s Critical Habitat Provisions
As enacted in 1973, the ESA mentioned critical
habitat only in Section 7’s consultation provision. See
Norman D. James & Thomas J. Ward, Critical
Habitat’s Limited Role Under the Endangered Species
Act and Its Improper Transformation into “Recovery”
Habitat, 35 J. ENVTL. L. 1, 12 (2016). The 1973 Act
“d{id] not define ‘critical habitat.” Tenn. Valley Auth. v.
Hill, 437 U.S. 153, 160 n.9 (1978).
Five years later, this Court held that the
Tennessee Valley Authority must cease building a
nearly completed dam to prevent the destruction of the
snail darter’s critical habitat. Hill, 437 U.S. at 165.
Because the completion of the Tellico Dam would
7
“result in total destruction of the snail darter’s
habitat,” the statute required that the threat to the
fish be halted “whatever the cost.” Jd. at 162, 184.
The Tellico Dam litigation led Congress to believe
that more “flexibility is needed in the Act.” H.R. Rep.
No. 95-1625, at 13, 1978 U.S.C.C.A.N. at 9463.
Congress responded by “defin[ing] for the first time”
the term “critical habitat” to “narro[w] the scope of the
term” and address the problem that too broad a
definition “could conceivably lead to the designation of
virtually all of the habitat of a listed species as its
critical habitat.” Id. at 25, 1978 U.S.C.C.A.N. at 9475.
As amended, ESA Section 4 requires FWS “by
regulation,” “to the maximum extent prudent and
determinable,” to “designate any habitat of [the listed]
species which is then considered to be critical habitat.”
16 U.S.C. § 1533(a)(3)(A). Section 3, in turn, defines
“critical habitat” to mean:
(i) the specific areas within the geographical
area occupied by the species, at the time it is
listed * * *, on which are found those physical
or biological features (I) essential to the
conservation of the species and (II) which may
require special management considerations or
protection; and
(ii) specific areas outside the geographical area
occupied by the species at the time it is listed
*** upon a determination by the Secretary
that such areas are essential for the
conservation of the species.
16 U.S.C. § 1532(5)(A). The 1978 amendments also
provided that except in “circumstances determined by
the Secretary, critical habitat shall not include the
entire geographical area which can be occupied by the
[listed] species.” Id. § 1532(5)(C).
8
Explaining these amendments, the House
Merchant Marine and Fisheries Committee urged that
“the Secretary should be exceedingly circumspect in
the designation of critical habitat outside of the
presently occupied area of the species.” H.R. Rep. No.
95-1625, at 18, 1978 U.S.C.C.A.N. at 9468. Represen-
tative Murphy, a sponsor, confirmed that the
amendments created an “extremely narrow definition”
of critical habitat. S. Comm. on Env’t & Pub. Works,
97th Cong., A LEGISLATIVE HISTORY OF THE
ENDANGERED SPECIES ACT OF 1973, AS AMENDED IN
1976, 1977, 1978, 1979, AND 1980, at 1221 (Comm.
Print 1982) (“LEG. HIST.”).
At the time FWS designated critical habitat for the
dusky gopher frog, its regulations provided that it
“may designate as critical occupied habitat” areas “that
contain certain physical or biological features called
‘primary constituent elements, or ‘PCEs,” such as
space for normal behavior, nutritional or physiological
requirements, breeding sites, and shelter. Pet. App.
83a (quoting 50 C.F.R. § 424.12(b) (2012)).
FWS regulations provided that the agency could
“designate as critical unoccupied habitat” areas outside
the geographical areas occupied by the species if it
determined the habitat “is essential for the
conservation of the species’ and ‘only when a
designation limited to its present range would be
inadequate to ensure the conservation of the species.”
Pet. App. 83a (quoting 16 U.S.C. § 1532(5)(A)(ii) and 50
C.F.R. § 424.12(e)).?
2 Citing this case, FWS amended its regulations in 2016 to align
with the designation criteria it applied to dusky gopher frog
habitat. 81 Fed. Reg. 7439 (Feb. 11, 2016). See Part II.B, infra.
9
C. FWS’s Designation Of Unoccupied Critical
Habitat For The Dusky Gopher Frog
The dusky gopher frog “is a terrestrial amphibian
endemic to the longleaf pine ecosystem.” Pet. App. 84a-
85a. It spends most of its life “underground in forested
habitat consisting of fire-maintained, open-canopied,
pine woodlands historically dominated by longleaf
pine.” bid. (quoting 77 Fed. Reg. at 35129-35131).
Frogs travel from their underground retreats to “small,
isolated ephemeral ponds to _ breed”—-because
ephemeral ponds lack predator fish—“then return to
their subterranean forested environment.” Pet. App.
85a. “Frequent fires” are “critical to maintaining the
prey base” for the frog and the necessary “diverse
ground cover of herbaceous plants, both in the uplands
and in the breeding ponds.” Jd. at 85a n.7 (quoting 77
Fed. Reg. at 35130).
FWS designated the dusky gopher frog as
endangered in 2001, but did not at that time designate
critical habitat. It did so in 2012, after settling
litigation to compel designation. Pet. App. 85a-86a.
1. FWS’s final designation. FWS identified three
habitat elements essential to the conservation of the
frog: ephemeral wetlands for breeding; upland forest
for non-breeding habitat; and upland areas connecting
the two. 77 Fed. Reg. at 35131. Essential to all three
are an “open canopy,” “herbaceous vegetation,” and
“fires frequent enough to support” those features. Ibid.
FWS conceded that the dusky gopher frog is
currently known to occur only in Mississippi. Id. at
35120. It nevertheless designated as critical habitat
1544 acres of forested land in St. Tammany Parish,
Louisiana, known as Unit 1, where the frog “had not
been seen * * * since the 1960s” and which is 50 miles
10
from where the frog now lives. Pet. App. 86a; see 77
Fed. Reg. at 35146 (map).
FWS designated Unit 1 because it contains isolated
ponds “into which dusky gopher frogs could be
translocated” to establish a new population. 77 Fed.
Reg. at 35135. FWS acknowledged that apart from
these ponds Unit 1 does not contain the necessary
clements for frog habitat: its uplands “do not currently
contain the essential physical or biological features of
critical habitat.” [bid.; see id. at 35129 (Unit 1 is “a
closed-canopy forest unsuitable as habitat for dusky
gopher frogs”). But FWS asserted that “the presence of
the PCEs is not a necessary clement for this
[unoccupied critical habitat] determination.” Id. at
35123. Although a new frog population could not be
established on Unit 1 without dramatically changing
the use of this privately owned land to “fire-
maintained, open-canopied, pine woodlands” (id. at
35129), FWS deemed Unit 1’s designation “essential for
the conservation of the species” because with all those
changes it could provide habitat for population
expansion. Id. at 35135.3
2. FWS’s economic analysis. ESA Section 4(b)(2)
requires the Secretary to “tak[e] into consideration the
economic impact” of specifying critical habitat and
provides that he “may exclude any area” if “he
determines that the benefits of such exclusion
3 After years of study FWS initially proposed a designation that
did not include Unit 1, only Mississippi sites. 75 Fed. Reg. 31387
(June 3, 2010). In response to comments, FWS later added Unit 1
“as a future site for frog reestablishment,” though “it only contains
one primary constituent clement” of frog habitat, to address the
“risk of extirpation and extinction from stochastic events” (76 Fed.
Reg. 59774, 59780 (Sept. 27, 2011))-—-i.e., as a “backup” site to
those in Mississippi.
11
outweigh the benefits of [designation]” (unless
exclusion would result in extinction of the species). 16
U.S.C. § 1533(b)(2).
Petitioner Weyerhaeuser owns part of Unit 1 and
leases the remainder from longtime family owners to
grow and harvest timber. [ts lease expires in 2043. RE
108. After Hurricane Katrina, Unit 1's higher elevation
made it desirable for residential and commercial
development. The landowners, including Weyer-
haeuser, undertook comprehensive joint planning for
future development, obtaining zoning changes and
local approvals. RE 108-109. FWS acknowledged that
the owners “invested a significant amount of time and
dollars into their plans to develop” Unit 1, which is
“particularly attractive for development” because
“Loutsiana Highway 36 runs through [it].” IEC,
Economic Analysis of Critical Habitat Designation for
the Dusky Gopher Frog, at 4-3 4 73 (Apr. 6, 2012)
(“Final Econ. Analysis”).*
FWS recognized that designation of Unit 1 could
interfere with the planned development. If the ponds
fall within CWA jurisdiction, that would necessitate a
Section 7 consultation and result in the imposition of
CWA permit conditions. FWS calculated that permit
* St. Tammany Parish is “fast-growing,” with “[t]he area
immediately surrounding [Unit 1] experiencing particularly rapid
growth” that includes “large warehousing facilities,” a “new high
school,” and “major transportation infrastructure” to serve a
population that increased “22 per cent{] between 2000 and 2010”
and continues to grow rapidly. Final Econ. Analysis at 4-2 { 71.
The Parish Council opposed the designation of Unit 1 because it
would “adversely impact small businesses and families” and
reduce tax revenues, and frequent fires would be a safety hazard.
St. Tammany Parish Council, Res. Council Ser. No. C-3274 (Nov.
3, 2011).
12
conditions requiring 60 percent of Unit 1 to be set aside
as frog habitat would destroy $20.4 million of
development value. If development were prohibited
altogether, the loss would be $33.9 million. RE 119-
120; 77 Fed. Reg. at 35140-35141. This “reduction in
land value occurs immediately at the time of
designation.” RE 120.
FWS recognized that no monetary benefits from
the designation can be quantified, but found benefits
“expressed in biological terms.” 77 Fed. Reg. at 35141;
RE 121-123. Balancing the up-to-$34 million loss to the
landowners against unquantified biological benefits,
FWS “did not identify any disproportionate costs” of
designation and so declined to exclude Unit 1 from
designation. Jd. at 35141. Notably, however, even if
CWA permits were denied, “the Government is aware
that Unit 1 cannot be used for the conservation of the
[frog] because someone” would “have to significantly
modify Unit 1 to make it suitable for frog habitat” and
the “only evidence in the record is that the owners do
not plan to do so.” Pet. App. 76a-77a (Owen, J.,
dissenting).
D. The District Court Decision
The landowners brought Administrative Procedure
Act challenges to designation of Unit 1 as critical
habitat. The district court observed that the Service's
“remarkably intrusive” designation “has all the
hallmarks of governmental insensitivity to private
property” and raises “troubling question{s].” Pet. App.
103a. Nevertheless, on cross-motions for summary
judgment the court “[rleluctantly” upheld the
designation against challenges that it violated the ESA
because “Unit 1 does not meet the statutory definition
of ‘critical habitat”; that it was arbitrary and
capricious because “FWS unreasonably determined
13
that Unit 1 is ‘essential’ for conservation of the frog’;
and that FWS’s economic analysis was flawed. /d. at
102a-103a.
E. The Fifth Circuit’s Divided Panel Decision
And En Banc Vote
The Fifth Circuit affirmed by a divided vote. The
majority undertook an “extremely limited and highly
deferential” review. Pet. App. Ga. It rejected the
landowners “argu[ments] that the Service ‘exceeded its
statutory authority’ under the ESA and acted
arbitrarily and capriciously.” Jd. at 2la. Without
engaging in close analysis of statutory text, structure,
or history, the majority held that “[t]here is no
habitability requirement in the text of the ESA” and
that only occupied critical habitat need contain all the
elements necessary to provide habitat—unoccupied
critical habitat need not do so. Id. at 23a-24a. It
concluded that FWS acted reasonably “when it found
that the currently uninhabitable Unit 1 was essential
for the conservation of the dusky gopher frog.” Ibid.
The court also held that once FWS fulfilled its duty
to consider the economic impacts of designation, its
determination whether to exclude an area from
designation based on those impacts is discretionary,
that there are no manageable standards a reviewing
court could apply to that decision, and that the decision
therefore is not judicially reviewable. Pet. App. 33a-
35a.
Judge Owen dissented from this “unprecedented
and sweeping” holding that “re-writes the Endangered
Species Act.” Pet. App. 50a, 65a. She would have held
that “an area cannot be ‘essential for the conservation
of the species’ if it is uninhabitable by the species and
there is no reasonable probability that it will become
habitable by the species.” Jd. at 60a.
14
Six judges dissented from denial of en banc review.
Writing for the dissenters, Judge Jones would have
granted review because “the ramifications of this
decision for national land use regulation and for
judicial review of agency action cannot be
underestimated.” Jd. at 126a.
The dissenters would have held, first, that the
ESA’s plain language and history “unequivocally
establish that only ‘habitat of such species’ may be
designated as critical habitat.” Pet. App. 132a-142a.
Because the dusky gopher frog cannot “naturally live
and grow in” Unit 1, Unit 1 “cannot be designated as
the frog’s critical habitat.” Jd. at 142a. Second, the
ESA’s “text, drafting history, and precedent” require
that the test for unoccupied critical habitat must be
“more demanding” than the test for occupied critical
habitat, not less demanding as the panel majority held.
Id. at 142a-150a. Third, the panel's decision violated
the constraints Congress imposed by leaving the
Service's critical habitat designation power “virtually
limitless.” Jd. at 155a. Finally, the dissenters explained
that the panel’s ruling that FWS’s economic analysis is
not judicially reviewable contradicts the presumption
of reviewability of agency action and this Court's
decision in Bennett v. Spear, supra. Pet. App. 156a-
162a. These errors, the dissenters urged, underline
“the importance of further review.” Jd. at 162a.
REASONS FOR GRANTING THE PETITION
I. The Fifth Circuit Misinterpreted The ESA’s
Critical Habitat Provisions.
As a matter of law, Unit 1 is not critical habitat of
the dusky gopher frog. The frog does not live there,
cannot live there, and will not live there in the future.
The ESA prohibits designation of uninhabitable,
unoccupied land as critical habitat.
15
A. The ESA Prohibits Designation Of Unit 1 As
Critical Habitat.
1. The panel majority’s interpretation of the critical
habitat provisions contravened the plain language of
the ESA. The panel held that “[t]here is no habitability
requirement in the text of the ESA.” Pet. App. 23a.
But, properly interpreted, “the ESA contains a clear
habitability requirement.” Jd. at 131la (Jones, J.).
ESA Section 4 requires FWS to “designate any
habitat of [a listed] species which is then considered to
be critical habitat.” 16 U.S.C. § 1533(a)(3)(A)(i)
(emphasis added). This phrasing means that “critical
habitat” “must first be ‘any habitat of such species.”
Pet. App. 132a (Jones, J.). The “irreducible minimum”
of critical habitat “is that it be habitat.” Id. at 137a.5
5 Weyerhaeuser preserved this argument. It told the district court
that “there is no conceivable logic under which Unit 1 can be
considered ‘habitat.”” Weyerhaeuser Mem. in Support of Mot. for
Summ. Judgment 14, D. Ct. Dkt 67-1 ((Dec. 9, 2013).
Weyerhaeuser explained that for unoccupied areas, “the separate
statutory * * * requirement that designated areas be ‘habitat’ in
the first instance is not obviated”: Congress “made clear in
§ 1533(a)(3)(A)(i) that the Secretary may only designate any
‘habitat’ as critical habitat.” Weyerhaeuser Reply and Memo. in
Opp. to Defs’ Mot. for Summ. Judgment 12, D. Ct. Dkt 106 (May 2,
2014). The district court rejected a “habitat” requirement without
addressing Section 1533(a). Pet. App. 106a-108a.
The Fifth Circuit likewise rejected Weyerhaeuser's argument
that the FWS “exceeded its statutory authority” when it
designated Unit 1 though it “is not currently habitable by the
frog.” Pet. App. 21a, 23a. The dissenters from the denial of en
banc review, by contrast, would have held that “a species’ critical
habitat must be a subset of the species’ habitat.” Id. at 131a.
Accordingly, the question whether the “habitat” requirement of
Section 1533(a) must be satisfied before unoccupied critical
habitat may be designated was presented and decided below and
16
That straightforward textual reading prohibits
designation of Unit 1 as critical habitat for the dusky
gopher frog. “Habitat” is “the place where a plant or
animal species naturally lives and grows” or “the kind
of site or region with respect to physical features * * *
naturally or normally preferred by a biological species.”
WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY
(1961); see AMERICAN HERITAGE DICTIONARY OF THE
ENGLISH LANGUAGE (1981) (“habitat” is the “area or
type of environment in which an organism or biological
population normally lives or occurs”); RANDOM HOUSE
DICTIONARY OF THE ENGLISH LANGUAGE (2d ed. unabr.
1987) (“the kind of place that is natural for the life and
growth of an organism”).
Unit 1 is not “habitat” because it lacks at least two
of the three features necessary for the frog’s survival.
This fact is “undisputed.” Pet. App. 49a (Owen, J.); see
id. at 131a (Jones, J.). FWS admitted that “loblolly”
pine “plantations” with “a closed-canopy forest”—which
describes Unit 1—are “unsuitable as habitat for dusky
gopher frogs.” 77 Fed. Reg. at 35129. FWS found that
Unit 1's “uplands” “do not currently contain the
essential physical or biological features of critical
habitat.” Jd. at 35135. And FWS admitted that
“managf{ing]” Unit 1 to create habitat and “trans-
locat[ing]” the frog to Unit 1 “cannot be implemented
without the cooperation and permission of the
landowner,” which is “voluntary.” Jd. at 35123.
is preserved for this Court’s review. See Pet. App. 139a
(“Throughout this litigation, the habitability issue, and the
landowners’ argument that the ESA requires a species’ critical
habitat to be habitable by that species, is well documented” and
“anything but inadequate”); Stephen M. Shapiro, et al., SUPREME
COURT PRACTICE 466 (10th ed. 2013).
17
Given those undisputed facts, Unit 1 is not critical
habitat as a matter of law. The panel “sanction[ed] the
oxymoron of uninhabitable critical habitat based on an
incorrect view of the statute.” Pet. App. 138a (Jones,
J.).
2. The panel’s ruling violated the ESA’s definition
of critical habitat for other reasons too. ESA Section 3
defines critical habitat to mean “occupied” land that
contains “those physical or biological features
(1) essential to the conservation of the species and
(1) which may require” special management
considerations or protection,” and unoccupied “aress”
that are “essential to the conservation of the species.”
16 U.S.C. § 1532(5)(A).
There is no dispute that, if the frog occupied Unit
1, Unit 1 could not be designated as critical habitat
because it lacks the “physical or biological features”
that are “essential to the conservation of the species.”
16 U.S.C. § 1532(5)(A)(i). In ruling that FWS properly
designated Unit 1 as unoccupied critical habitat, the
Fifth Circuit made it easier to designate unoccupied,
uninhabitable land as critical habitat than occupied
land. A correct interpretation of the statute would have
“confirm[ed| the commonsense notion that the test for
unoccupied critical habitat is designed to be more
stringent than the test for occupied critical habitat.”
Pet. App. 142a (Jones, J.).
The statutory phrase “areas [that] are essential for
the conservation of the species” cannot reasonably be
read to extend to areas in which a species cannot
survive, either now or in the foreseeable future.
“Essential” means “[ijndispensably necessary;
important in the highest degree; requisite. That which
is required for the continued existence of a thing.”
BLACK’sS LAW DICTIONARY (5th ed. 1979); see WEBSTER’S
18
THIRD NEW _ INTERNATIONAL DICTIONARY, supra
(“necessary or indispensable”); RANDOM HOUSE DICT-
IONARY, supra (“absolutely necessary; indispensable”).
Those definitions do not cover Unit 1, which “plays
no part in the conservation” of the frog (Pet. App. 48a
(Owen, J.)), “will not support” the frog (ibid.), and is
“distant” from where the frog actually lives. 77 Fed.
Reg. at 35124. As 15 States explained in supporting
the landowners’ en banc petition, “the panel’s decision
strips the word ‘essential’ of all meaning, declaring
habitat essential to conservation even if a species
would immediately die if moved there. A desert could
be critical habitat for a fish, a barren, rocky field
critical habitat for an alligator.” Am. Br. of Ala., et al.,
in Support of Rh’g En Banc at 3. “The language of the
[ESA] does not permit such an expansive interpret-
ation and consequent overreach by the Government.”
Pet. App. 49a (Owen, J.). The Fifth Circuit erroneously
upheld a designation that is not “based on a
permissible construction of the statute.” Chevron,
U.S.A., Inc. v. N.R.D.C., 467 U.S. 837, 843 (1984).
3. “It is a ‘fundamental canon of statutory
construction that the words of a statute must be read
in their context and with a view to their place in the
overall statutory scheme.” Natl Ass'n of Home
Builders, 551 U.S. at 666. But the Fifth Circuit’s ruling
is at odds with the “[s]urrounding provisions” and
“structure” of the ESA. Esquivel-Quintana v. Sessions,
137 S. Ct. 1562, 1570 (2017).
ESA Section 7 requires federal agencies to consult
with FWS to ensure that their actions will not “result
in the destruction or adverse modification of habitat of
lany listed] species which is determined by the
Secretary” to be “critical.” 15 U.S.C. § 1536(a)(2)
(emphasis added). As with Section 4, Section 7 is
19
unambiguous that critical habitat must be habitat. The
Fifth Circuit severed the link between those concepts,
in violation of both ESA Section 4 and Section 7.
The Fifth Circuit's ruling also clashes with the
remainder of ESA Section 3’s definition of critical
habitat. Section 3 provides that, generally, “critical
habitat shall not include the entire geographical area
which can be occupied by the threatened or endangered
species.” 16 U.S.C. § 1532(5)(C). That provision shows
that Congress envisioned critical habitat to be at most
coextensive with, and almost always narrower than, the
area that “can be occupied” by the listed species. The
Fifth Circuit’s ruling allows FWS to designate critical
habitat beyond the area “which can be occupied by” the
listed species, as here, and thereby contradicts
statutory text and Congress's intent.
Other provisions of the ESA confirm that Congress
understood “critical habitat” to mean areas occupied by
a listed species plus a narrow category of unoccupied
areas that contain the habitat a species needs and that
are “essential” to the species’ survival. For example,
ESA Section 4 requires that FWS periodically publish
lists that identify “over what portion of its range” a
listed species “is endangered or threatened, and specify
any critical habitat within such range.” 16 U.S.C.
§ 1533(c)(1) (emphasis added). But Unit 1 does not lie
“within” the dusky gopher frog’s “range.” See RANDOM
HOUSE DICTIONARY, supra (“range” is “the region over
which a population or species is distributed”);
AMERICAN HERITAGE DICTIONARY, supra (“[t]he
geographical region in which a kind of plant or animal
normally lives or grows”); 13 THE OXFORD ENGLISH
DICTIONARY (2d ed. 1989) (“[t]he geographical area over
which a certain plant or animal is distributed”).
Indeed, FWS designates unoccupied land as critical
habitat only when it determines that “a designation
20
limited to [a species’] range would be inadequate.” 77
Fed. Reg. at 35128. FWS points to the “historical”
range of species (e.g., 76 Fed. Reg. at 59780), but that
term appears nowhere in the ESA, which talks only
about a species’ “range.” 16 U.S.C. §§ 1532(6),
1533(a)(1)(A), 1533(c)(1). FWS’s position contradicts
the plain language of the statute.®
Finally, ESA Section 5 authorizes the Secretary of
the Interior to conserve listed species by acquiring
“lands, waters, or interest therein.” 16 U.S.C. § 1534.
That power is not limited to “habitat” or lands
“essential” to species survival. As this Court pointed
out in Sweet Home, “the Section 5 authority” is well
suited to address land “that is not yet but may in the
future become habitat for an endangered or threatened
species.” 515 U.S. at 703. If FWS wants to turn non-
habitat into habitat and translocate the frog there,
Section 5 provides the appropriate mechanism—not a
critical habitat designation that imposes all the costs
for creating a new frog preserve on private landowners.
The Fifth Circuit failed to “account for both ‘the
specific context in which * * * language is used’ and
‘the broader context of the statute as a whole.” Util.
Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2442
(2014). That context supports the dissent’s approach.
6 Other provisions confirm that Congress did not envisage
designation of unoccupied, uninhabitable areas. Section 4
instructs FWS to give notice of a proposed designation only to “the
State agency” and “county” “in which the species is believed to
occur.” 16 U.S.C. § 1533(b)(5)(A)(@i). Section 6 permits FWS to
form “cooperative agreements” with States that have a program
which adequately protects “resident species.” Jd. § 1535(c)(1)(A)-
(E). And Congress authorized FWS to allocate funds to States with
cooperative agreements, based on “the number of endangered
species and threatened species within a State.” Id. § 1535(d)(1)(C).
21
4. The ESA’s legislative history bolsters this
conclusion. In the 1978 amendments that defined
critical habitat for the first time, Congress sought to
“narro[w] the scope of the term” because it was
concerned that a broad definition could result in
“designation of virtually all of the habitat of a listed
species as its critical habitat.” H.R. Rep. No. 95-1625,
at 25, 1978 U.S.C.C.A.N. at 9475. Accordingly,
Congress enacted an “extremely narrow definition” of
critical habitat. LEG. HIST., supra, at 1221.
The Fifth Circuit’s interpretation, however, is
extremely broad. It allows FWS to designate land that
lies outside “all of the habitat of a listed species.” H.R.
Rep. No. 95-1625, at 25. And it saddles landowners
with the nearly insurmountable burden of proving that
FWS’s factual findings are “implausible.” Pet. App.
24a. “{I]t is easy to predict that judges will, like the
panel majority, almost always defer to the Service's
[essentiality] decisions.” Pet. App. 155a (Jones, J.). The
Fifth Circuit’s ruling “is the opposite of what Congress
declared” when it enacted the critical habitat
provisions. Id. at 149a; see also id. at 137a n.4 (the
legislative history “indicates uniform awareness in
Congress that a species’ critical habitat was a subset of
the species habitat”).
5. “[S]tatutes should be interpreted to avoid
constitutional doubts.” Clark v. Martinez, 543 U.S. 371,
379 (2005). And courts “assum[e] that Congress does
not casually authorize administrative agencies to
interpret a statute to push the limit of congressional
authority.” SWANCC, 531 U.S. at 172-173. Yet FWS’s
designation does just that, “rais[ing] significant
constitutional questions” in two ways. Id. at 173.
First, FWS’s designation tests the boundaries of
the Commerce Clause. “The Commerce Clause
22
empowers Congress to regulate ‘commerce, not
habitat.” Nat'l Ass’n of Home Builders v. Babbitt, 130
F.3d 1041, 1066 (D.C. Cir. 1997) (Sentelle, J.,
dissenting). There is no interstate commerce in the
dusky gopher frog. These frogs live only in Mississippi
and “spend most of their lives underground” except
when traveling to and from ephemeral ponds to breed.
77 Fed. Reg. at 35129. FWS found no commercial value
in the frogs or in the designation of the frogs’ critical
habitat. It found only unquantifiable, noneconomic
“biological” benefits. 77 Fed. Reg. at 35127. “[T]his is a
far cry, indeed, from” the regulation of interstate
commerce. SWANCC, 531 U.S. at 173.
The lack of a commerce connection is exacerbated
when it comes to Unit 1. Even if the frog had
commercial value—or if the overall scheme of
protecting rare species were enough to satisfy
Commerce Clause requirements—there still would be
no commerce element to designating Unit 1. The frog
does not and cannot live there; hence the landowners’
activities have no effect on the frog. See National
Federation of Independent Business v. Sebelius, 567
U.S. 519, 550 (2012) (“The power to regulate commerce
presupposes the existence of commercial activity to be
regulated”). If the non-commercial frog’s absence from
a place it does not and cannot live is sufficient to
satisfy the Commerce Clause, nothing at all lies
beyond the power of federal regulators.
Second, FWS’s designation “result[s] in a
significant impingement of the States’ traditional and
primary power over land and water use.” SWANCC,
531 U.S. at 174. “Regulation of land use” is “a
quintessential state and local power.” Rapanos v.
United States, 547 U.S. 715, 738 (2006) (plurality). The
Fifth Circuit's decision “signals a huge potential
expansion of [FWS’s] power effectively to regulate
23
privately- or State-owned land.” Pet. App. 143a (Jones,
J.). Here, FWS acknowledged, St. Tammany Parish has
rezoned Unit 1 to accommodate residential, com-
mercial, civic, and open space uses that will serve the
needs of this fast-growing community into the future.
Final Econ. Analysis, supra, at 4-2 to 4-3. But FWS’s
designation—through the CWA permitting process—
would turn all or most of the land into a dusky gopher
frog preserve, requiring the owners to “conduc[t] forest-
ry management using prescribed burning,” “maintain
an open canopied forest with abundant herbaceous
ground cover,’ and in numerous other ways create new
habitat for imported frogs. 77 Fed. Reg. at 35132.
This Court “expect[s] a ‘clear and manifest’ state-
ment from Congress to authorize an unprecedented
intrusion into traditional state authority.” Rapanos,
547 U.S. at 738 (plurality). But “[rjather than expres-
sing a desire to readjust the federal-state balance”
(SWANCC, 531 U.S. at 174), the ESA declares that it is
“the policy of Congress that Federal agencies shall
cooperate with State and local agencies to resolve
water resource issues in concert with conservation of
endangered species” (16 U.S.C. § 1531(c)(2))—precisely
what is involved here because CWA protection of ponds
and wetlands is the sole basis for FWS to require the
landowners to manage Unit 1 to create frog habitat.
That policy is the exact opposite of a clear and manifest
statement directing FWS to usurp States’ traditional
authority to regulate land use.
The Fifth Circuit should have “read the statute as
written to avoid the[se] significant constitutional and
federalism questions,” by rejecting FWS’s extravagant
claim that it may designate unoccupied, non-essential,
non-habitat as “critical habitat.” SWANCC, 531 U.S. at
174.
24
B. The Fifth Circuit’s Ruling Conflicts With
Decisions Of The Ninth Circuit.
The Fifth Circuit held that, while occupied critical
habitat must “contai[n] ‘those physical or biological
features * * * essential to the conservation of the
species,” unoccupied critical habitat need not do so.
Pet. App. 15a, 23a. The Fifth Circuit thus “ma[d]e it
easter to designate as critical habitat the land on which
the species cannot survive than that which is occupied
by the species.” Pet. App. 1438a (Jones, J.). That
“remarkable and counterintuitive reading” conflicts
with decisions of the Ninth Circuit, which “has twice
confirmed that unoccupied critical habitat is a
narrower concept than occupied critical habitat.” Jd. at
143a, 147a.
In Arizona Cattle Growers’ Association v. Salazar,
606 F.3d 1160, 1163 (9th Cir. 2010), the Ninth Circuit
held that the ESA “impos[es] a more onerous procedure
on the designation of unoccupied areas.” The plaintiff
argued that, in designating critical habitat for the
Mexican Spotted Owl, “FWS treated unoccupied areas
as occupied to avoid this more onerous process.” [bid.
After reviewing the administrative record, the Ninth
Circuit concluded that FWS reasonably determined
that the owl in fact occupied the designated areas. Id.
at 1167-*171. That analysis would have been
unnecessary under the Fifth Circuit’s ruling, which
imposes a lower standard on the designation of
unoccupied critical habitat.
In Home Builders Association of Northern
California v. U.S. Fish & Wildlife Services, 616 F.3d
983, 990 (9th Cir. 2010), plaintiff argued that FWS
conflated occupied and unoccupied critical habitat
when it designated vernal pool complexes as critical
habitat for various species. The Ninth Circuit held that
25
the challenge failed because FWS’s designation
satisfied “the standard for unoccupied habitat,” which
is “more demanding” than the standard for “occupied
critical habitat.” Jbid. That holding leaves no doubt
that the Ninth Circuit views the standard for
unoccupied critical habitat as more stringent than the
standard for occupied critical habitat.
The Fifth Circuit’s ruling also conflicts with
numerous district court decisions holding that the
standard for unoccupied critical habitat is more
demanding than that of occupied critical habitat. See,
e.g., Am. Forest Res. Council v. Ashe, 946 F.Supp.2d 1,
44 (D.D.C. 2013) (“more demanding standard for
unoccupied habitat”), affd, 601 F. App’x 1 (D.C. Cir.
2015); Cape Hatteras Access Pres. All. v. U.S. Dep't of
Interior, 344 F.Supp.2d 108, 125 (D.D.C. 2004)
(“Designation of unoccupied land is a_ more
extraordinary event that designation of occupied
lands”); see also Ctr. for Biological Diversity v. Kelly,
93 F.Supp.3d 1193, 1202 (D. Idaho 2015) (“The
standard for designating unoccupied habitat is more
demanding tian that of occupied critical habitat”); All.
for Wild Rockies v. Lyder, 728 F.Supp.2d 1126, 1138
(D. Mont. 2010) (“the ESA imposes ‘a more onerous
procedure on the designation of unoccupied areas”).
In short, the Fifth Circuit’s ruling broke sharply
from existing judicial interpretations of the ESA’s
critical habitat provisions. This Court should grant
certiorari to restore uniformity among the lower courts.
26
ll. The Meaning Of “Critical Habitat” Is Of
Immense And Immediate Public Importance.
A. The Panels Ruling Inflicts Significant
Costs On Private Landowners, With No
Benefits To Endangered Species.
1. This case puts into sharp relief the staggering
“regulatory burdens and corresponding economic costs”
imposed on landowners when FWS designates private
land as “critical habitat.” Andrew J. Turner and Kerry
L. McGrath, A Wider View of the Impacts of Critical
Habitat Designation, 43 ENVTL. L. REPORTER 10678,
10680 (2013). As the district court observed, FWS's
designation of Unit 1 was “remarkably intrusive’ and
“insensitiv[e] to private property.” Pet. App. 103a. FWS
and the panel acknowledged that. upon designation,
Unit I's value “immediately” plummeted “given the
‘stigma’ attached to critical-habitat designations.” Jd.
at l3a.
FWS explained that in a Section 7 consultation it
might “recommen[d] that no [future] development
occur” on Unit 1, and found that doing so would cost
Unit 1's landowners $34 million in lost development
opportunities. Pet. App. 75 n.84, 117a; 77 Fed. Reg. at
35141. If it allowed development at all, FWS said it
could condition a CWA permit on the landowners
creating and maintaining frog habitat on 60 per cent of
Unit 1, at a cost of $20.4 million. 77 Fed. Reg. at 35141.
These estimates ignored additional costs associated
with controlled burns, the “negative impacts” of which
FWS said it could not quantify. Jd. at 35126. It
excluded too the toll of the Section 7 consultation
process, which “often takes months or years,
significantly delaying projects and resulting in
substantial additional project costs, if not destroying
the projects’ economic viability.” Turner & McGrath,
Zi
supra, 43 ENVT'L L. REPORTER at 10681. The costs to
the landowners of participating in the regulatory
proceedings and in this litigation have been significant
too. The economic, regulatory, and litigation burdens
on Unit 1’s landowners have been astounding.
Meanwhile, the designation provides no benefits to
the frog. As FWS explained, “designation does not
require property owners to undertake affirmative
actions to promote the recovery of the listed species.”
77 Fed. Reg. at 35123. It is “voluntary” for Unit 1's
owners whether to create habitat for the frog, as
“habitat management through prescribed burning, or
frog translocations to the site, cannot be implemented
without the cooperation and permission of the
landowner.” Ibid. Any benefit to the frog thus hinges
on FWS’s “hope to work with the landowners.” Ibid.
But “there is no evidence that the substantial
alterations and maintenance necessary to transform
the area into habitat suitable for the endangered
species will, or are likely to, occur.” Pet. App. 48a
(Owen, J.). “[T]he land is subject to a timber lease until
2043, timber operations are ongoing. and neither the
owner of the property nor the timber lessee is willing to
permit the substantial alterations that [FWS]
concluded would be necessary” to create habitat for the
frog. Id. at 52a.
The landowners thus face the Catch-22 that they
can continue forestry operations on the frogless land
largely unhindered by the designation. But if they try
to develop the land consistent with their plans and
current zoning, the designation may well stop the
development in its tracks—which again would not help
the frog. Either way, the designation destroys economic
activity, leaves the land as unoccupied non-habitat,
and does nothing to help the frog.
28
2. The disconnect between the burden on private
landowners and the lack of benefit to the species is
nothing new. FWS has long understood that critical
habitat designation “provides little additional
protection to most listed species,” is “driven by
litigation rather than biology,” and “imposes huge
social and economic costs.” 68 Fed. Reg. 46684, 46684
(Aug. 6, 2003). FWS has “seriously question[ed]” the
“utility” of designation and concluded that it “is not an
efficient or effective means of securing the conservation
of species.” 62 Fed. Reg. 39129, 39131 (July 22, 1997).
Scholars likewise have found no evidence “that
critical habitat designation promotes _ species’
recoveries or prevents species’ declines.” Joe Kerkvliet
and Christian Langpap, Learning from Endangered
and Threatened Species Recovery Programs: A Case
Study Using U.S. Endangered Species Act Recovery
Scores, 63 ECOL. ECON. 499, 508 (2007). To the
contrary, designation often perversely “induce[s]
habitat destruction” because landowners preemptively
destroy habitat to “avoid costly land-use restrictions.”
Dean Lueck and Jeffrey A. Michael, Preemptive
Habitat Destruction Under the Endangered Species Act,
46 J.L. & ECON. 27, 51 (2003).
At the same time, critical habitat designation
increases the costs and reduces the amount of
development. See Jeffrey E. Zabel and Robert W.
Paterson, The Effects of Critical Habitat Designation
on Housing Supply: An Analysis of California Housing
Construction Activity, 46 J. REG’L Sci. 67, 67 (2006)
(designations decreased housing construction by 37
percent). Here, the unwarranted designation of Unit 1
threatens a substantial commercial and residential
development for which local government rezoned the
area to serve the needs of the fast-growing St.
Tammany Parish population.
ZY
This imbalance of costs and _ benefits is
characteristic of the critical habitat program, and made
worse by FWS’s expansionary zeal to reach unoccupied
non-habitat. “The fact that the biologists themselves
have found critical habitat of such little utility
bespeaks the low tally on the benefits side, and the
costs of the provisions are evinced in the delays and
resource drain caused by both designation and the
frequent litigation that follows.” Sheila Baynes, Cost
Consideration and the Endangered Species Act, N.Y.U.
L. REV. 961, 998 (2015).
This widely acknowledged gulf between costs and
benefits counsels interpreting ESA’s unoccupied
critical habitat provisions according to their plain
language and Congress’s intent—that is, narrowly.
FWS’s expansive construction inflicts severe costs on
landowners and affected communities with no
countervailing environmental benefit.
3. FWS’s approach has no meaningful limit. As
Judge Owen explained, “the linchpin” of the panel
majority's ruling is that “uninhabitable land” may be
designated as critical habitat if the land could “be
transformed into habitat” and contains “at least one
‘physical or biological featur[e] * * * essential to the
conservation of the species.” Pet. App. 63a-64a; see id.
at 30a n.20 (majority) (“if the ponds are essential, then
Unit 1, which contains the ponds, is essential for the
conservation of the dusky gopher frog”). Under the
panel’s ruling, “vast portions of the United States could
be designated as ‘critical habitat.” Pet. App. 49a.
As Judge Jones understood, the panel’s ruling
bestows “virtually limitless” authority on FWS given
the types of “physical and biological features that
[F WS] has deemed essential to species’ conservation” —
including “{i}ndividual trees with potential nesting
30
platforms, ‘forested areas within 0.5 mile” of
“individual trees with potential nesting platforms,’
‘aquatic breeding habitat,’ ‘upland areas, and ‘[a]
natural light regime within the coastal dune
ecosystem.” Pet. App. 155a (footnotes omitted). Judge
Jones cautioned that, “[w]ith no real limiting principle
to the panel majority’s one-feature-suffices standard,
there is no obstacle to the Service's claiming critical
habitat wherever ‘forested areas’ or ‘a natural light
regime’ exist.” Jd. at 156a.
The panel's “unprecedented and sweeping”
expansion of FWS power would “encourage aggressive,
tenuously based interference with property rights” and
with State authority over land use. Jd. at 156a, 162a.
This Court should overturn it now before more damage
is done.
B. FWS’s New Rule Formalizing Its Authority
To Designate Unoccupied Non-Habitat Re-
inforces The Need For Immediate Review.
In 2016, FWS revised its regulations to conform to
the approach it took in this case. Revised 50 C.F.R.
§ 424.12 provides that FWS may designate as critical
habitat “specific areas outside the geographical area
occupied by the species that are essential for its
conservation, considering the life history, status, and
conservation needs of the species.” 81 Fed. Reg. 7414,
7439 (Feb. 11, 2016). FWS explained that unoccupied
areas “need not have the features essential to the
conservation of the species” to be designated, even
though those “physical or biological features” are
necessary to designate occupied areas. Id. at 7420-
7421, 7425, 7434. FWS acknowledged—citing the
district court’s ruling in this case—that this new rule
“is not a change from the way we have been
designating unoccupied critical habitat.” Jd. at 7427.
31
Twenty States challenged the 2016 rule,
contending that it is inconsistent with the ESA and
arbitrary and capricious. Alabama v. National Marine
Fisheries Service, No. 1:16-cv-00593 (S.D. Ala.) (First
Amended Complaint filed Feb. 2, 2017, Dkt. 30). No
responsive pleadings have been filed and the case is
stayed until September 11, 2017, at the government's
request. Dkt. 46.
The pendency of that early-stage litigation does not
reduce the need for review in this case. The new rule
formalizes the same incorrect statutory interpretation
with which FWS justified its designation of Unit 1 and
which the Fifth Circuit upheld. And while resolution of
the rule challenge would have no effect on the
erroneous judgment for which review is sought here,
this Court’s reversal in this case would foreordain the
result of the rule challenge, because FWS concedes
that the rule is “not a change” from the basis on which
it designated the landowners’ property. 81 Fed. Reg. at
7427.
This case provides the Court with the opportunity
to resolve the issues presented in a_ concrete,
particularized context. The features of the designated
tract are known and undisputed, which illuminates the
dire consequences of FWS’s mistaken reading of the
ESA. Rather than delay resolution of important
questions about a major federal environmental statute
for years while the rule challenge proceeds, this Court
should resolve them now.
III. The Panel’s Erroneous Holding That FWS’s
Decision Not To Exclude Unit 1 From Design-
ation Is Judicially Unreviewable “Play[{s]
Havoc With Administrative Law.”
FWS must “tak[e] into consideration the economic
impact” of a designation and “may exclude any area
32
from critical habitat if [it] determines that the benefits
of such exclusion outweigh the benefits” of designation.
16 U.S.C. § 1533(b)(2). FWS purported to take into
account the economic impact of designating Unit 1—
concluding that designation could cost the landowners
up to $34 million but that unquantifiable “biological”
benefits meant there were no “disproportionate costs”
to justify excluding Unit 1 from designation. 77 Fed.
Reg. at 35141. As the dissenters below observed, the
“shocking fact” that designation may cost landowners
$34 million is matched by the “shocking fact[s]” that
“there is virtually nothing on the other side of the
economic ledger” and that FWS “never performed a
comparison of the relevant costs.” Pet. App. 158a-159a.
Petitioner challenged FWS’s refusal to exclude
Unit 1 from designation on economic grounds as
arbitrary and counter to the evidence before the
agency. See Pet. App. 159a; Motor Vehicle Mfrs. Ass’n
v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42
(1983). The panel majority refused to consider that
challenge on the ground that FWS’s determination
whether to exclude is discretionary and there are no
judicially manageable standards for a reviewing court
to apply. Pet. App. 33a.
But the dissenters pointed out that ruling “play[s]
havoc with administrative law.” Pet. App. 156a (Jones,
J.). It flies in the face of the “strong presumption
favoring judicial review of administrative action.”
Mach Mining, LLC v. EEOC, 135 S. Ct. 1645, 1653
(2015). It also flatly “contradict[s this] Court’s
statement in Bennett v. Spear, 520 U.S. 154 (1997) that
the Service’s ultimate decision is reviewable for abuse
of discretion.” Pet. App. 156a-157a; see 520 U.S. at 172.
Such review is indispensible: Bennett recognized that a
“primary” “objective” under the ESA “is to avoid
needless economic dislocation produced by agency
33
officials zealously but unintelligently pursuing their
environmental objectives.” 520 U.S. at 176-177. If
private landowners cannot challenge FWS’s cost-
benefit analysis, how would that objective ever be
achieved?
Abuse of discretion is a familiar standard of review
that is administrable by the judiciary. See Harry T.
Edwards, et al., FEDERAL STANDARDS OF REVIEW 78-81
(2d ed. 2013). Furthermore, the State Farm analysis
guides review of FWS's weighing of economic benefits.
See Motor Vehicle Mfrs., 463 U.S. at 43 (reviewing
whether an agency’s explanation for its decision is
“counter to the evidence” or thoroughly “implausible”.
The clash between the panel decision and this Court’s
precedent on the availability of judicial review suffices
to warrant certiorari on petitioner's second question
presented.
CONCLUSION
The petition for certiorari should be granted.
34
Respectfully submitted.
RICHARD C. STANLEY TIMOTHY S. BISHOP
Stanley, Reuter, Ross, Counsel of Record
Thornton & Alford, LLC CHAD M. CLAMAGE
909 Poydras Street, Suite Mayer Brown LLP
2500 71 South Wacker Drive
New Orleans, LA 70112 Chicago, Illinois 60606
(504) 523-1580 (312) 782-0600
thishop@mayerbrown.com
JAMES R. JOHNSTON
ZACHARY R. HIATT
Weyerhaeuser Company
220 Occidental Ave. S.
Seattle, Washington 98104
(206) 539-4361
Counsel for Petitioner
JULY 2017
APPENDIX
la
APPENDIX A
UNITED STATES COURT OF APPEALS FOR
THE FIFTH CIRCUIT
No. 14-31008
Markle Interests, L.L.C.; P&F Lumber Company
2000, L.L.C.; PF Monroe Properties, L.L.C.,
Plaintiffs—Appellants
Vv.
United States Fish and Wildlife Service; Daniel M.
Ashe, Director of United States Fish & Wildlife Ser-
vice, in his official capacity; United States Depart-
ment of Interior; Sally Jewell, in her official capacity
as Secretary of the Department of Interior,
Defendants—Appellees
Center for Biological Diversity; Gulf Restoration
Network, Intervenor Defendants—Appellees
Weyerhaeuser Company, Plaintiff—Appellant
Vv.
United States Fish and Wildlife Service; Daniel M.
Ashe, Director of United States Fish & Wildlife Ser-
vice, in his official capacity; Sally Jewell, in her offi-
cial capacity as Secretary of the Department of
Interior, Defendants—Appellees
Center for Biological Diversity; Gulf Restoration
Network, Intervenor Defendants—Appellees
Cons w/ No. 14-31021
Filed June 30, 2016
2a
Appeals from the United States District Court
for the Eastern District of Louisiana
Before REAVLEY, OWEN, and HIGGINSON, Cir-
cuit Judges.
STEPHEN A. HIGGINSON, Circuit Judge:
Opinion
This appeal requires us to consider the United
States Fish and Wildlife Service’s inclusion of private
land in a critical-habitat designation under the En-
dangered Species Act. Misconceptions exist about
how critical-habitat designations impact private
property. Critical-habitat designations do not trans-
form private land into wildlife refuges. A designation
does not authorize the government or the public to
access private lands. Following designation, the Fish
and Wildlife Service cannot force private landowners
to introduce endangered species onto their land or to
make modifications to their land. In short, a critical-
habitat designation alone does not require private
landowners to participate in the conservation of an
endangered species. [n a thorough opinion, District
Judge Martin L.C. Feldman held that the Fish and
Wildlife Service properly applied the Endangered
Species Act to private land in St. Tammany Parish,
Louisiana. As we discuss below, we AFFIRM Judge
Feldman’s judgment upholding this critical-habitat
designation.
Ja
FACTS AND PROCEEDINGS
This case is about a frog—the Rana sevosa—
commonly known as the dusky gopher frog.! These
frogs spend most of their lives underground in open-
canopied pine forests.2 They migrate to isolated,
ephemeral ponds to breed. Final Designation, 77
Fed. Reg. at 35,129. Ephemeral ponds are only sea-
sonally flooded, leaving them to dry out cyclically
and making it impossible for predatory fish to sur-
vive. See id. at 35,129, 35,131. After the frogs are fin-
ished breeding, they return to their underground
habitats, followed by their offspring. Jd. at 35,129.
When the dusky gopher frog was listed as an endan-
gered species, there were only about 100 adult frogs
known to exist in the wild.* Although, historically,
the frog was found in parts of Louisiana, Mississippi,
and Alabama, today, the frog exists only in Missis-
sippi. Final Rule, 66 Fed. Reg. at 62,993—94; Final
! See Designation of Critical Habitat for Mississippi Gopher Frog, 76
Fed. Reg. 59,774, 59,775 (proposed Sept. 27, 2011) (to be codified at 50
C.F.R. pt. 17) [hereinafter Revised Proposal]. The frog was previously
known as the Mississippi gopher frog, but further taxonomic research in-
dicated that the dusky gopher frog is different from other gopher frogs,
warranting, acceptance as its own species: the Rana sevosa or the dusky
gopher frog. /d. We will refer to the frog as the dusky gopher frog.
2 Designation of Critical Habitat for Dusky Gopher Frog (Previously
Mississippi Gopher Frog), 77 Fed. Reg. 35,118, 35,129 (June 12, 2012)
(to be codified at 50 C.F.R. pt. 17) [hereinafter Final Designation]. It ap-
pears that the frogs are not accustomed to human interaction. If you pick
up a gopher frog and hold it, the frog will play dead and even cover its
eyes; if you hold the frog long enough, it will peak at you and then pre-
tend to be dead again.
* See Final Rule to List the Mississippi Gopher Frog Distinct Population
Segment of Dusky Gopher Frog as Endangered, 66 Fed. Reg. 62,993,
62,993, 62,995, 63,000 (Dec. 4, 2001) (to be codified at 50 C.F.R. pt. 17)
(hereinafter Final Rule}.
4a
Designation, 77 Fed. Reg. at 35,132. The primary
threat to the frog is habitat degradation. Final Rule,
66 Fed. Reg. at 62,994.
In 2010, under the Endangered Species Act
(“ESA”), 16 U.S.C. §§ 1531-1544, the United States
Fish and Wildlife Service (“the Service”)4 published a
proposed rule to designate 1,957 acres in Mississippi
as “critical habitat” for the dusky gopher frog.5 [n re-
sponse to concerns raised during the peer-review
process about the sufficiency of this original pro-
posal, the Service’s final designation of critical habi-
tat expanded the area to 6,477 acres in four counties
in Mississippi and one parish in Louisiana. See Re-
vised Proposal, 76 Fed. Reg. at 59,776; Final Desig-
nation, 77 Fed. Reg. at 35,118-19. The designated
area in Louisiana (“Unit 1”) consists of 1,544 acres in
St. Tammany Parish. Final Designation, 77 Fed.
Reg. at 35,118. Although the dusky gopher frog has
not occupied Unit 1 for decades, the land contains
historic breeding sites and five closely clustered
ephemeral ponds. See Revised Proposal, 76 Fed. Reg.
at 59,783; Final Designation, 77 Fed. Reg. at 35,123—
24, 35,133, 35,135. The final critical-habitat designa-
tion was the culmination of two proposed rules, eco-
nomic analysis, two rounds of notice and comment, a
scientific peer-review process including responses
* The Secretary of the Department of the Interior and the Secretary of the
Department of Commerce are jointly charged with administering the
ESA. See 16 U.S.C. § 1532(15). The Secretary of the Interior administers
the ESA through the Fish and Wildlife Service. We refer to both the Sec-
retary and the agency as the “Service.”
5 See Designation of Critical Habitat for Mississippi Gopher Frog, 75
Fed. Reg. 31,387, 31,387 (proposed June 3, 2010) (to be codified at 50
C.F.R. pt. 17) [hereinafter Original Proposal].
5a
from six experts, and a public hearing. See Final
Designation, 77 Fed. Reg. at 35,119.
Together, Plaintiffs-Appellants Markle Interests,
L.L.C., P&F Lumber Company 2000, L.L.C., PF
Monroe Properties, L.L.C., and Weyerhaeuser Com-
pany (collectively, “the Landowners”) own all of Unit
1. Weyerhaeuser Company holds a long-term timber
lease on all of the land that does not expire until
2043. The Landowners intend to use the land for res-
idential and commercial development and timber op-
erations. Through consolidated suits, all of the Land-
owners filed actions for declaratory judgment and in-
junctive relief against the Service, its director, the
Department of the Interior, and the Secretary of the
Interior. The Landowners challenged only the Ser-
vice’s designation of Unit 1 as critical habitat, not
the designation of land in Mississippi.
The district court allowed the Center for Biologi-
cal Diversity and the Gulf Restoration Network (col-
lectively, “the Intervenors”) to intervene as defend-
ants in support of the Service’s final designation. All
parties filed cross-motions for summary judgment.
Although Judge Feldman granted summary judg-
ment in favor of the Landowners on the issue of
standing, he granted summary judgment in favor of
the Service on the merits. See Markle Interests, LLC
v. U.S. Fish & Wildlife Serv., 46 F. Supp. 3d 744,
748, 769 (E.D. La. 2014). The Landowners timely ap-
pealed.
STANDARD OF REVIEW
We review a district court's grant of summary
judgment de novo. Nola Spice Designs, L.L.C. v.
Haydel Enters., Inc., 783 F.3d 527, 536 (5th Cir.
2015); see also Sabine River Auth. v. U.S. Dep't of In-
ba
terior, 951 F.2d 669, 679 (5th Cir. 1992) (noting that
the court of appeals reviews the administrative rec-
ord de novo when the district court reviewed an
agency's decision by way of a motion for summary
judgment). Our review of the Service's administra-
tion of the ESA is governed by the Administrative
Procedure Act (“APA”). See Bennett v. Spear, 520
U.S. 154, 171-75 (1997) (holding that a claim chal-
lenging the Service’s alleged “maladministration of
the ESA” is not reviewable under the citizen-suit
provisions of the ESA, but is reviewable under the
APA); see also 5 U.S.C. §§ 702, 704. When reviewing
agency action under the APA, this court must “set
aside agency action, findings, and conclusions found
to be—{A) arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law; (B)
contrary to constitutional right, power, privilege, or
immunity; [or] (C) in excess of statutory jurisdiction,
authority, or limitations.” 5 U.S.C. § 706(2).
Review under the _ arbitrary-and-capricious
standard is “extremely limited and highly deferen-
tial,” Gulf Restoration Network v. McCarthy, 783
F.3d 227, 243 (5th Cir. 2015) (internal quotation
marks omitted), and “there is a presumption that the
agency's decision is valid,” La. Pub. Serv. Comm'n v.
F_E.R.C., 761 F.3d 540, 558 (5th Cir. 2014) (internal
quotation marks omitted). The plaintiff has the bur-
den of overcoming the presumption of validity. La.
Pub. Serv. Comm'n, 761 F.3d at 558.
Under the arbitrary-and-capricious standard,
we will not vacate an agency’s decision un-
less it has relied on factors which Congress
had not intended it to consider, entirely
failed to consider an important aspect of the
problem, offered an explanation for its deci-
7a
sion that runs counter to the evidence before
the agency, or is so implausible that it could
not be ascribed to a difference in view or the
product of agency expertise.
Nat’ Ass’n of Home Builders v. Defenders of Wildlife,
551 U.S. 644, 658 (2007) (internal quotation marks
omitted). We must be mindful not to substitute our
judgment for the agency’s. FCC v. Fox Television Sta-
tions, Inc., 556 U.S. 502, 513 (2009). That said, we
must still ensure that “[the] agency examine[d] the
relevant data and articulate[d] a satisfactory expla-
nation for its action.” Id. (internal quotation marks
omitted). “We will uphold an agency’s action if its
reasons and policy choices satisfy minimum stand-
ards of rationality.” 10 Ring Precision, Inc. v. Jones,
722 F.3d 711, 723 (5th Cir. 2013) (internal quotation
marks omitted).
DISCUSSION
The Landowners raise three challenges to the
Service’s designation of Unit 1 as critical habitat for
the dusky gopher frog. They argue that the designa-
tion (1) violates the ESA and the APA, (2) exceeds
the Service’s constitutional authority under the
Commerce Clause, U.S. Const. art. I, § 8, cl. 3, and
(3) violates the National Environmental Policy Act
(“NEPA”), 42 U.S.C. § 4321 et. seq. As we discuss be-
low, each of their arguments fails.
I. Endangered Species Act
Congress enacted the ESA “to provide a means
whereby the ecosystems upon which endangered spe-
cies ... depend may be conserved” and “to provide a
program for the conservation of such endangered
species.” 16 U.S.C. § 1531(b). The ESA broadly de-
Sa
fines “conservation.” It includes “the use of all meth-
ods and procedures which are necessary to bring any
endangered species .. . to the point at which the
measures provided [by the ESA] are no longer neces-
sary.” Id. § 1532(3). In other words, “the objective of
the ESA is to enable [endangered] species not merely
to survive, but to recover from their endangered or
threatened status.” Sierra Club v. U.S. Fish & Wild-
life Serv., 245 F.3d 434, 438 (5th Cir. 2001); see also
Tenn. Valley Auth. v. Hill, 437 U.S. 153, 184 (1978)
(“The plain intent of Congress in enacting this stat-
ute was to halt and reverse the trend toward species
extinction, whatever the cost. This is reflected not
only in the stated policies of the Act, but in literally
every section of the statute.”).
To achieve this objective, the ESA requires the
Service to first identify and list endangered and
threatened species. See 16 U.S.C. § 1533(a)(1). List-
ing a species as endangered or threatened then trig-
gers the Service’s statutory duty to designate critical
habitat “to the maximum extent prudent and deter-
minable.” See id. § 1533(a)(3)(A)(i).® “Critical habitat
® The Service typically is required to designate critical habitat at the same
time that it lists a species as endangered or threatened. 16 U.S.C.
§ 1533(aX3)(A)(i). But if critical habitat is not “determinable” at the time
of listing, the Service can extend the deadline for making a critical-habitat
designation. See id. § 1533(b)(6)(AXii), (bX6C\ii). Although the Ser-
vice listed the dusky gopher frog as endangered in 2001, it declined to
designate critical habitat at that time because of budget limitations. See
Final Rule, 66 Fed. Reg. at 63,000. Six years later, in 2007, the Service
still had not designated critical habitat for the frog. The Center for Bio-
logical Diversity therefore sued the Service for failing to timely designate
critical habitat. That lawsuit resulted in a court-approved settlement
agreement that set deadlines for the Service to designate critical habitat
for the dusky gopher frog. The Service’s resulting designations under this
9a
designation primarily benefits listed species through
the ESA’s [Section 7] consultation mechanism.” Sier-
ra Club, 245 F.3d at 439; see 16 U.S.C. § 1536 (de-
scribing the Section 7 consultation process). Under
this section, once habitat is designated as critical,
federal agencies are prohibited from authorizing,
funding, or carrying out any action that is likely to
result in “the destruction or adverse modification” of
that critical habitat without receiving a special ex-
emption.’? 16 U.S.C. § 1536(a)(2). To satisfy the re-
quirements of Section 7, federal agencies must con-
sult with the Service before taking any action that
might negatively affect critical habitat.* Only federal
agencies—not private parties—must engage in this
Section 7 consultation process. See id.; 50 C.F.R.
§ 402.14(a). Thus, as Judge Feldman explained, “ab-
sent a federal nexus, [the Service] cannot compel a
private landowner to make changes to restore his
designated property into optimal habitat.” Markle In-
terests, 40 F. Supp. 3d at 750.
A. Standing
Before addressing the merits of the Service's crit-
ical-habitat designation, we first address whether
agreement, including the designation of Unit 1, prompted the lawsuit that
we are considering on appeal.
’ Section 7 consultation is also required whenever any federal action will
“jeopardize the continued existence” of an endangered species, regardless
of whether the Service has designated critical habitat. 16 U.S.C.
§ 1536(aX(2); see Sierra Club, 245 F.3d at 439.
* If the Service determines that a contemplated action the issuance of a
permit, for example is likely to adversely modify critica! habitat, the
Service must suggest “reasonable and prudent alternatives” that the con-
sulting agency could take to avoid adverse modification. See 50 C.F.R.
§ 402.14(h)(3). These alternatives must be “economically and technologi-
cally feasible.” /d. § 402.02.
10a
the Landowners have standing to challenge the des-
ignation. “The question of standing involves both
constitutional limitations on federal-court jurisdic-
tion and prudential limitations on its exercise.” Ben-
nett, 520 U.S. at 162 (internal quotation marks omit-
ted). In particular, to establish standing under the
APA, in addition to Article III standing, a plaintiff
must show that “the interest sought to be protected
by the [plaintiff] is arguably within the zone of inter-
ests to be protected or regulated by the statute or
constitutional guarantee in question.” Jd. at 175
(quoting Ass’n of Data Processing Serv. Orgs., Inc. v.
Camp, 397 U.S. 150, 153 (1970)). Although the dis-
trict court correctly held that the APA provided the
proper vehicle for the Landowners to challenge the
Service’s administration of the ESA, the district
court did not address the APA’s zone-of-interests
test; instead, it held only that the Landowners have
standing under Article III. On appeal, the Service
did not brief the zone-of-interests issue or challenge
the district court’s conclusion that the Landowners
have Article II] standing.
Even though the Service did not appeal the dis-
trict court’s standing conclusion, we must inde-
pendently assess the Landowners’ Article III stand-
ing.” See Hang On, Inc. v. City of Arlington, 65 F.3d
1248, 1251 (5th Cir. 1995) (“The federal courts are
under an independent obligation to examine their
own jurisdiction, and standing is perhaps the most
important of the jurisdictional doctrines.” (altera-
tions and internal quotation marks omitted)). “Arti-
cle III of the Constitution limits federal courts’ juris-
® This Article III standing analysis applies to all of the Landowners’
claims, not just the Landowners’ claim under the ESA.
lla
diction to certain ‘Cases’ and ‘Controversies.” Clap-
per U. Amnesty Intl USA, 133 S. Ct. 1138, 1147
(2013). “To satisfy the ‘case’ or ‘controversy’ require-
ment of Article [11, which is the ‘irreducible constitu-
tional minimum’ of standing, a plaintiff must. . .
demonstrate that he has suffered ‘injury in fact,’ that
the injury is ‘fairly traceable’ to the actions of the de-
fendant, and that the injury will likely be redressed
by a favorable decision.” Bennett, 520 U.S. at 162
(quoting Lujan vu. Defenders of Wildlife, 504 U.S. 555,
560-61 (1992)). The injury must be concrete and par-
ticularized, as well as actual or imminent. Lujan,
504 U.S. at 560; see also Crane v. Johnson, 783 F.3d
944, 251 (5th Cir. 2015) (“Although imminence is
concededly a somewhat elastic concept, it cannot be
stretched beyond its purpose, which is to ensure that
the alleged injury is not too speculative for Article LI]
purposes—that the injury is certainly impending.”).
“The party invoking federal jurisdiction bears the
burden of establishing these elements.” Lujan, 504
U.S. at 561.
Here, the Landowners assert two alleged inju-
ries: lost future development and lost property value.
The first-—loss of future development—is too specu-
lative to support Article III standing. Although “[a]n
increased regulatory burden typically satisfies the
injury in fact requirement,” Contender Farms, L.L.P.
v. U.S. Dep't of Agric., 779 F.3d 258, 266 (5th Cir.
2015), any regulatory burden on Unit 1 is purely
speculative at this point. As the Service exu:phasized
in the designation, if future development occurring
on Unit 1 avoids impacting jurisdictional wetlands,
no federal permit would be required and the ESA’s
Section 7 consultation process would not be trig-
gered. See Final Designation, 77 Fed. Reg. at 35,126
(noting that the range of possible economic impact to
12a
Unit 1 of $0 to $33.9 million “reflects uncertainty re-
garding future land use”); id. at 35,140 (observing
that “considerable uncertainty exists regarding the
likelihood of a Federal nexus for development activi-
ties [in Unit 1]”); see also 16 U.S.C. § 1536(a)(2); 50
C.F.R. § 402.14(a). Judge Feldman similarly stressed
this point, explaining that, “if a private party’s action
has no federal nexus (if it is not authorized, funded,
or carried out by a federal agency), no affirmative ob-
ligations are triggered by the critical habitat desig-
nation.” Markle Interests, 40 F. Supp. 3d at 750.
Because the Landowners have not provided evi-
dence that specific development projects are likely to
be impacted by Section 7 consultation,'® lost future
development is too speculative to support standing.
See Lujan, 504 U.S. at 564 (“Such ‘some day’ inten-
tions—without any description of concrete plans, or
indeed even any specification of when the some day
will be—do not support a finding of the ‘actual or
imminent’ injury that our cases require.”); see also
Clapper, 133 S. Ct. at 1147-48 (holding that plain-
tiffs did not have standing to challenge the Foreign
Intelligence Surveillance Act in part because they
provided no evidence supporting their “highly specu-
lative fear” that the government would imminently
'0 To the contrary, the record reflects that, at the time Unit | was desig-
nated, development plans had already been delayed because of the reces-
sion and the mortgage crisis. This uncertainty about development not on-
ly underscores the absence of a concrete injury, but also highlights that
any injury, however speculative, is not fairly traceable to the critical-
habitat designation. Moreover. the long-term timber lease running on the
land until 2043 also suggests that development may not occur on Unit |
in the foreseeable future. Although the Landowners suggest that they
could renegotiate the timber lease as conditions change, they have not
demonstrated that they have concrete plans to do so.
13a
target communications to which plaintiffs were par-
ties); Crane, 783 F.3d at 252 (holding that Mississip-
pi did not have sta nding to challenge the federal gov-
ernment’s deferred-action policy because its imjury
was “purely speculative” and because it failed to
“»nroduce evidence of costs it would incur” because of
the policy); cf. Cape Hatteras Access Pres. Alliance v.
U.S. Dep't of Interior, 344 F. Supp. 2d 108, 117-18
(D.D.C. 2004) (holding that the burdens of Section 7
consultation supported standing when the plaintiffs
identified specific, ongoing development projects that
would be delayed because of the consultation re-
quirement).
The Landowners’ assertion of lost property value,
by contrast, is a concrete and particularized injury
that supports standing. See Sabine River Auth., 951
F.2d at 674 (recognizing that injury in fact includes
economic injury). The Landowners assert that their
land has already lost value as a result of the critical-
habitat designation. Indeed, as the Service recog-
nized in its Final Economic Analysis, given the
“stigma” attached to critical-habitat designations,
“[pJublic attitudes about the limits or restrictions
that critical habitat may impose can cause real eco-
nomic effects to property owners, regardless of
whether such limits are actually imposed.” As a re-
sult, “a property that is designated as critical habitat
may have a lower market value than an identical
property that is not within the boundaries of critical
habitat due to perceived limitations or restrictions.”
The Service further assumed that “any reduction in
land value due to the designation of critical habitat
will happen immediately at the time of the designa-
tion.”
l4a
Causation and redressability flow naturally from
this injury. [f a plaintiff—or, here, the plaintiffs’
land—is the object of government action, “there is
ordinarily little question that the action . . . has
caused him injury, and that a judgment preventing
... the action will redress it.” Lujan, 504 U.S. at
561-62. We conclude that the Landowners’ decreased
property value is fairly traceable to the Service's crit-
ical-habitat designation and that this injury would
likely be redressed by a favorable decision. Thus, the
Landowners have established Article III standing
based on lost property value.
The question nevertheless remains whether the
Landowners satisfy the APA’s zone-of-interests re-
quirement. See Bennett, 520 U.S. at 175-77. The
Service, however, has not argued—either in the dis-
trict court or this court—that the Landowners’ inter-
ests fall outside the zone of interests that the ESA is
designed to protect. “Unlike constitutional standing,
prudential standing arguments may be waived.” Bd.
of Miss. Levee Comm'rs v. EPA, 674 F.3d 409, 417-18
(5th Cir. 2012).'' Although we have previously con-
sidered the zone-of-interests issue sua sponte, see
Natl Solid Waste Mgmt. Ass'n v. Pine Belt Reg Sol-
id Waste Mgmt. Auth., 389 F.3d 491, 498 (5th Cir.
2004), we decline to do so here. Because the Service
failed to raise this argument, we hold that the Ser-
vice has forfeited a challenge to the Landowners’
standing under the zone-of-interests test. We thus
'' We are mindful that the Supreme Court has recently clarified that
“‘prudential standing’ is a misnomer as applied to the zone-of-interests
analysis,” emphasizing instead that the analysis requires “using tradition-
al tools of statutory interpretation.” Lexmark Int'l, Inc. v. Static Control
Components, Inc., 134 S. Ct. 1377, 1387 (2014) (citation and internal
quotation marks omitted).
15a
conclude that the Landowners have standing to chal-
lenge the Service’s critical-habitat designation.
B. Critical-Habitat Designation
The ESA expressly envisions two types of critical
habitat: areas occupied by the endangered species at
the time it is listed as endangered and areas not oc-
cupied by the species at the time of listing. See 16
U.S.C. § 1532(5)(A)G@)—(ii). To designate an occupied
area as critical habitat, the Service must demon-
strate that the area contains “those physical or bio-
logical features . . . essential to the conservation of
the species.”!? Id. § 1532(5)(A)(i). To designate unoc-
cupied areas, the Service must determine that the
designated areas are “essential for the conservation
of the species.” Id. § 1532(5)(A)(ii). As Judge Feld-
man noted below, “Congress did not define ‘essential’
but, rather, delegated to the Secretary the authority
to make that determination.” Markle Interests, 40 F.
Supp. 3d at 760. Thus, when the Service promul-
gates, in a formal rule, a determination that an un-
occupied area is “essential for the conservation” of an
endangered species, Chevron deference is appropri-
ate. See id. (citing Chevron, U.S.A., Inc. v. Natural
Res. Def. Council, Inc., 467 U.S. 837, 843 n.9 (1984));
Knapp v. U.S. Dep't of Agric., 796 F.3d 445, 454 (5th
Cir. 2015) (“[A]dministrative implementation of a
'? Under the regulations in place at the time of the critical-habitat desig-
nation at issue here, the Service referred to these “physical or biological
features” as “primary constituent elements” or “PCEs.” 50 C.F.R.
§ 424.12(b) (2012). The primary constituent elements that make up the
dusky gopher frog’s habitat are (1) ephemeral ponds used for breeding,
(2) upland, open-canopy forests “adjacent to and accessible to and from
breeding ponds,” and (3) upland connectivity habitat to allow the frog to
move between breeding and nonbreeding habitats. Final Designation, 77
Fed. Reg. at 35,131.
16a
particular statutory provision qualifies for Chevron
deference when it appears [(1)] that Congress dele-
gated authority to the agency generally to make
rules carrying the force of law, and [(2)] that the
agency interpretation claiming deference was prom-
ulgated in the exercise of that authority.” (altera-
tions in original)).
The Service must designate critical habitat “on
the basis of the best scientific data available and af-
ter taking into consideration the economic impact,
the impact on national security, and any other rele-
vant impact, of specifying any particular area as crit-
ical habitat.” Jd. § 1533(b)(2). “When examining this
kind of scientific determination, as opposed to simple
findings of fact, a reviewing court must generally be
at its most deferential.” Balt. Gas & Elec. Co. v. Nat-
ural Res. Def. Council, Inc., 462 U.S. 87, 103 (1983);
Medina Cnty. Envtl. Action Ass’n v. Surface Transp.
Bd., 602 F.3d 687, 699 (5th Cir. 2010) (“Where an
agency's particular technical expertise is involved,
we are at our most deferential in reviewing the agen-
cy’s findings.”).
In addition, under the regulations in place at the
time of the critical-habitat designation at issue here,
before the Service could designate unoccupied land
as critical habitat, it first had to make a finding that
“a designation limited to [a species’] present range
would be inadequate to ensure the conservation of
the species.” 50 C.F.R. § 424.12(e) (2012) (emphasis
added). Unit 1 is unoccupied. Thus, under its own
regulations, the Service first had to make an inade-
quacy determination. The Service’s first proposed
designation included only land in Mississippi and did
not include Unit 1. See Original Proposal, 75 Fed.
Reg. at 31,395-99 (identifying eleven units in Mis-
l7a
sissippi). During the peer-review and comment pro-
cess on this original proposal, the expert reviewers
expressed that the designated habitat in the proposal
was inadequate to ensure the conservation of the
frog. The experts therefore urged the Service to ex-
pand the designation to Louisiana or Alabama, the
two other states in the frog’s historical range. See
Revised Proposal, 76 Fed. Reg. at 59,776; Final Des-
ignation, 77 Fed. Reg. at 35,119, 35,121, 35,123—24.
The Service adopted this consensus expert con-
clusion, finding that designating the occupied land in
Mississippi was “not sufficient to conserve the spe-
cies.” Final Designation, 77 Fed. Reg. at 35,123. The
Service explained that “[rjecovery of the dusky go-
pher frog will not be possible without the establish-
ment of additional breeding populations of the spe-
cies,” and it emphasized that it was necessary to des-
ignate critical habitat outside of Mississippi to pro-
tect against potential local events, such as drought
and other environmental disasters. Id. at 35,124—25.
The Service therefore determined that “[a]dditional
areas that were not known to be occupied at the time
of listing are essential for the conservation of the
species.” Id. at 35,123. In sum, all of the experts
agreed that designating occupied land alone would
not be sufficient to conserve the dusky gopher frog.
Thus, the Service’s prerequisite inadequacy find-
ing—a finding that the Landowners did not chal-
lenge!“—-was not arbitrary and capricious.
‘3 Amici supporting the Landowners do challenge this finding, and the
Landowners asserted at oral argument that they would contest this find-
ing. The Landowners, however, did not challenge this finding in either of
their briefs on appeal. We therefore will not consider it. See World Wide
St. Preachers Fellowship v. Town of Columbia, 591 F.3d 747, 752 n.3
(Sth Cir. 2009) (“It is well-settled in this circuit that an amicus curiae
l&Sa
Having satisfied this preliminary requirement,
the Service was next required to limit the critical-
habitat designation to unoccupied areas that are “es-
sential for the conservation of the species.” 16 U.S.C.
§ 1532(5)(A)(ii). The Service focused its resources on
locating additional ephemeral ponds. It explained
that it prioritized ephemeral ponds because of their
rarity and great importance for breeding, and be-
cause they are very difficult to replicate artificially.
See Final Designation, 77 Fed. Reg. at 35,123-—24.
The Service further explained that additional breed-
ing populations are necessary for the frog’s recovery
and to prevent excessive inbreeding. See id. at
35,121, 35,123—24. Although the Service has created
one artificial ephemeral pond in the DeSoto National
Forest in Mississippi, this artificial pond took ten
years to construct, and it is still unclear whether it
will be successful as a breeding site. See id. at
35,123. In contrast, as an expert explained at the
public hearing on the Revised Proposal, it is “much
easier to restore a terrestrial habitat for the gopher
frog than to restore or build breeding ponds.” See al-
so id. at 35123 (“Isolated, ephemeral ponds that can
be used as the focal point for establishing these
populations are rare, and this is a limiting factor in
dusky gopher frog recovery.”). As the Service ex-
plained in the Final Designation, “[ajlthough
[DeSoto] is crucial to the survival of the frog because
the majority of the remaining frogs occur there, re-
covery of the species will require populations of
dusky gopher frog distributed across a broader por-
generally cannot expand the scope of an appeal to implicate issues that
have not been presented by the parties to the appeal.” (citation and inter-
nal quotation marks omitted)); see also Crane, 783 F.3d at 252 n.34 (ex-
plaining that a party waives an argument by failing to make it in the par-
ty’s opening brief).
19a
tion of the species’ historic distribution.” /d. at 35,
125.
The Service therefore searched for isolated,
ephemeral ponds within the historical range of the
frog in Alabama and Louisiana. See Final Designa-
tion, 77 Fed. Reg. at 35, 124. The area in Alabama
where the frog once lived has since been replaced by
a residential development. See id. The Service noted
that it was unable to find any breeding sites that the
frog might use in the future in Alabama. See id. In
contrast, the Service explained that Unit 1's five
ephemeral ponds are “intact and of remarkable qual-
ity.” Id. at 35, 133. It noted that the ponds in Unit 1
“are in close proximity to each other, which would al-
low movement of adult gopher frogs between them”
and would “provide metapopulation structure that
supports long-term survival and population resilien-
cy.” Id. “Based on the best scientific information
available to the Service,” the Service concluded that
“the five ponds in Unit 1 provide breeding habitat
that in its totality is not known to be present else-
where within the historic range of the dusky gopher
frog.” Id. at 35, 124.
Finally, in addition to ephemeral ponds, dusky
gopher frogs also require upland forested habitat and
connected corridors that allow them to move between
their breeding and nonbreeding habitats. See id. at
35, 131-32. Looking to the upland terrestrial habitat
surrounding Unit 1’s ephemeral ponds, the Service
relied on scientific measurements and data to draw a
boundary around Unit 1. The Service used digital
aerial photography to map the ponds and then to de-
lineate critical-habitat units by demarcating a buffer
zone around the ponds by a radius of 621 meters (or
2,037 feet). Id. at 35, 134. This value, which was
20a
based on data collected during multiple gopher frog
studies, represented the median farthest distance
that frogs had traveled from breeding sites (571 me-
ters or 1,873 feet) plus an extra 50 meters (or 164
feet) “to minimize the edge effects of the surrounding
land use.” Id. The Service finally used aerial imagery
to connect critical-habitat areas that were within
1,000 meters (or 3,281 feet) of each other “to create
routes for gene flow between breeding sites and
metapopulation structure.” Id.
Altogether, the Service concluded:
Unit 1 is essential to the conservation of the
dusky gopher frog because it provides: (1)
Breeding habitat for the dusky gopher frog in
a landscape where the rarity of that habitat
is a primary threat to the species; (2) a
framework of breeding ponds that supports
metapopulation structure important to the
long-term survival of the dusky gopher frog;
and (3) geographic distance from extant
dusky gopher frog populations, which likely
provides protection from environmental
stochasticity.
Id. As Judge Feldman reasoned below, “[the Ser-
vice’s] finding that the unique ponds located on Unit
1 are essential for the frog’s recovery is supported by
the ESA and by the record; it therefore must be up-
held in law as a permissible interpretation of the
ESA.” Markle Interests, 40 F. Supp. 3d at 761 (apply-
ing Chevron deference).
On appeal, the Landowners do not dispute the
scientific or factual support for the Service’s deter-
2la
mination that Unit 1 is essential.'4 Instead, they ar-
gue that the Service “exceeded its statutory authori-
ty” under the ESA and acted arbitrarily and capri-
ciously when it designated Unit 1 as critical habitat
because Unit 1 is not currently habitable, nor “cur-
rently supporting the conservation of the species in
any way,” nor reasonably likely to support the con-
servation of the species in the “foreseeable future.”
They contend that such land cannot rationally be
called “essential for the conservation of the species,”
bpGause if it can be, then the Service would have
‘nearly lumitless authority to burden private lands
with a critical habitat designation.”
As Judge Feldman noted, Congress has not de-
fined the word “essential” in the ESA. Hence the
Service has the authority to interpret the term. See
Sierra Club, 245 F.3d at 438 (“Once a species has
been listed as endangered .. . the ESA states that
the Secretary ‘shall’ designate a critical habitat ‘to
the maximum extent prudent or determinable. The
ESA leaves to the Secretary the task of defining
‘prudent’ and ‘determinable.” (quoting 16 U.S.C.
§ 1533(h))). To issue a formal rule designating criti-
cal habitat for the frog, the Service necessarily had to
interpret and apply the applicable ESA provisions,
including the word “essential.” See Natl R.R. Pas-
senger Corp. v. Boston & Maine Corp., 503 U.S. 407,
420 (1992) (“[W]e defer to an interpretation which
was a necessary presupposition of the [agency]’s de-
cision.”); cf. S.D. ex rel. Dickson v. Hood, 391 F.3d
581, 596 & n.13 (5th Cir. 2004) (explaining that,
'4 Amici do challenge the scope of the Unit | designation, but we will not
consider this argument because the Landowners did not raise it on appeal.
See World Wide St. Preachers Fellowship, 59\ F.3d at 752 n.3.
22a
when the Centers for Medicare and Medicaid Ser-
vices are charged with reviewing and approving state
Medicaid plans to ensure that the plans conform to
the Act, the agency implicitly interprets the Act
when granting approvals). The Service issued the
designation as a formal agency rule after two rounds
of notice and comment. Thus, the Service's interpre-
tation of the term “essential” is entitled to Chevron
deference. See Home Builders, 551 U.S. at 665 (ap-
plying Chevron deference in the context of the ESA);
Chevron, 467 U.S. at 842-44.
When, as here, “an agency’s decision qualifies for
Chevron deference, we will accept the agency’s rea-
sonable construction of an ambiguous statute that
the agency is charged with administering.” Anapp,
796 F.3d at 455. The question presented, then, is
whether the Landowners have demonstrated that
the Service interpreted the ESA unreasonably when
it deemed Unit 1 “essential” for the conservation of
the dusky gopher frog. Although the Landowners
acknowledge that “the Service undoubtedly has some
discretion in interpreting the statutory language of
the ESA,” they contend that the Service “does not
have the authority to apply the term ‘essential’ in a
way that is contrary to its plain meaning.” The
Landowners do not explain what they think the
“plain meaning” of essential is, however, save to ar-
gue, circularly, that we must “insist[{ |” that “essen-
tial’ must truly mean essential.”'®
‘5 The dissent instead introduces two alternative definitions of “essential”
from Black's Law Dictionary: “2. Of the utmost importance; basic and
necessary. 3. Having real existence, actual.” Dissent at 5. ‘The dissent then
goes on to cite MCI Telecommunications Corp. v. Am. Tel. & Tel. Co.,
512 U.S. 218, 229 (1994), for the proposition that “an agency’s interpre-
tation of a statute is not entitled to deference when it goes beyond the
23a
We consider first their argument that it is an un-
reasonable interpretation of the ESA to describe Unit
1 as essential for the conservation of the dusky go-
pher frog when Unit 1 is not currently habitable by
the frog. The statute does not support this argument.
There is no habitability requirement in the text of
the ESA or the implementing regulations. The stat-
ute requires the Service to designate “essential” are-
as, without further defining “essential” to mean
“habitable.” See Bear Valley Mut. Water Co. v. Jewell,
790 F.3d 977, 994 (9th Cir. 2015) (upholding the des-
ignation of unoccupied critical habitat, even though
the area was not habitable by the endangered spe-
cies). The Landowners’ proposed extra-textual limit
on the designation of unoccupied land—
habitability—effectively conflates the standard for
designating unoccupied land with the standard for
designating occupied land. See Dep't of Homeland
Sec. v. MacLean, 135 S. Ct. 913, 919 (2015) (“Con-
gress generally acts intentionally when it uses par-
ticular language in one section of a statute but omits
it in another.”). As Judge Feldman insightfully ob-
served, “[their position] is .. . contrary to the ESA;
{the Landowners] equate what Congress plainly dif-
ferentiates: the ESA defines two distinct types of
critical habitat, occupied and unoccupied; only occu-
pied habitat must contain all of the relevant [physi-
cal or biological features].” Markle Interests, 40 F.
meaning that the statute can bear.” Dissent at 7. The dissent’s own alter-
native definitions distinguish MC/ from this case. In MCI, the agency ad-
vanced an interpretation of the word “modify” that flatly contradicted the
definition provided by “[v]irtually every dictionary [the Court] was aware
of.” /d. at 225. Here, in contrast, one of the dissent’s own definitions of
essential—“of the utmost importance; basic and necessary” — describes
well a close system of ephemeral ponds, per the scientific consensus that
the Service relied upon. See infra note 20.
24a
Supp. 3d at 761. Thus, the plain text of the ESA does
not require Unit 1 to be habitable. “[RJather,” as
Judge Feldman elaborated, “[the Service] is tasked
with designating as critical unoccupied habitat so
long as it determines it is ‘essential for the conserva-
tion of the species’ and ‘only when a designation lim-
ited to its present range would be inadequate to en-
sure the conservation of the species.” Jd. at 762
(quoting 50 C.F.R. § 424.12(e)). Here, the Service
provided scientific data to support its finding that
Unit 1 is essential, and as Judge Feldman held, “[the
Landowners] have not demonstrated that [the Ser-
vice’s] findings are implausible.” Jd. Thus, the Land-
owners have not shown that the Service employed an
unreasonable interpretation of the ESA when it
found that the currently uninhabitable Unit 1 was
essential for the conservation of the dusky gopher
frog and designated the land as critical habitat.
We consider next the argument that it is an un-
reasonable interpretation of the ESA to describe Unit
1 as essential for the conservation of the dusky go-
pher frog when Unit 1 “is not currently supporting
the conservation of the species in any way and the
Service has no reasonable basis to believe that it will
do so at any point in the foreseeable future.” Like
their proposed habitability requirement, the Land-
owners’ proposed temporal requirement— considering
whether the frog can live on the land “currently” or
in the “foreseeable future”--also lacks legal support
and is undermined by the ESA’s text. The ESA’s crit-
ical-habitat provisions do not require the Service to
know when a protected species will be conserved as a
result of the designation. The Service is required to
designate unoccupied areas as critical habit at if
these areas are “essential for the conservation of the-
se species.” 16 U.S.C. § 1532(5)(A)(ii). The statute de-
25a
fines “conservation” as “the use of all methods and
procedures which are necessary to bring any endan-
gered species . . . to the point at which the measures
provided .. . are no longer necessary.” Id. § 1532(3);
cf. Alaska Oil & Gas Ass'n v. Jewell, 815 F.3d 544,
555 (9th Cir. 2016) (“The Act is concerned with pro-
tecting the future of the species[.]”). Neither of these
provisions sets a deadline for achieving this ultimate
conservation goal. See Home Builders Ass’n of N. Cal.
uv. U.S. Fish & Wildlife Serv., 616 F.3d 983, 989 (9th
Cir. 2010) (holding that the Service need not deter-
mine “exactly when conservation will be complete”
before making a critical-habitat designation). And
the Landowners do not explain why it is impossible
to make an essentiality determination without de-
termining when (or whether) the conservation goal
will be achieved. See id. (“A seller of sporting goods
should be able to identify which rod and reel are es-
sential to catching a largemouth bass, but is not ex-
pected to predict when the customer will catch one.”).
As Judge Feldman concluded, “[the Service's] failure
(as yet) to identify how or when a viable population
of dusky gopher frogs will be achieved, as indifferent
and overreaching by the government as it appears,
does not serve to invalidate its finding that Unit 1
was part of the minimum required habitat for the
frog’s conservation.” Markle Interests, 40 F. Supp. 3d
at 762-63. We also note that, in contrast to the habi-
tat-designation provision at issue here, the ESA’s re-
covery-plan provisions do require the Service to es-
timate when a species will be conserved. See 16
U.S.C. § 1533()(1)(B)Gii). Congress’s inclusion of a
conservation-timeline requirement for recovery
plans, but omission of it for critical-habitat designa-
26a
tions, further underscores the weakness of the Land-
owners’ argument. See MacLean, 135 S. Ct. at 919.'6
Moreover, we observe that the Landowners’ pro-
posed temporal requirement could effectively exclude
all private land not currently occupied by the species
from critical-habitat designations. By the Landown-
ers’ logic, private landowners could trump the Ser-
vice’s scientific determination that unoccupied habi-
tat is essential for the conservation of a species so
long as they declare that they are not currently will-
ing to modify habitat to make it habitable and that
they will not be willing to make modifications in the
foreseeable future. Their logic would also seem to al-
low landowners whose land is immediately habitable
to block a critical-habitat designation merely by de-
claring that they will not-—now or ever—permit the
reintroduction of the species to their land. The Land-
owners focus on private-party cooperation as part of
the definition of “essential” finds no support in the
text of the ESA. Nothing in the ESA requires that
private landowners be willing to participate in spe-
cies conservation.'?’ Summing up the Landowners’
—— - ” —_
'6 We further note that it was logical for Congress to require the Service
to estimate a timeline for achieving its conservation goals in a recovery
plan but not to impose that requirement for critical-habitat designations
because there is no deadline for creating a recovery plan, but there is a
one-year deadline for designating critical habitat. See 16 U.S.C.
§ LS33(b6OKAKMiD), (OM 6K CMI); see also Home Builders Ass'n of N.
Cal., 616 F.3d at 990.
‘7 The statute requires the Service to base its decision on “the best scien-
tific data available.” 16 U.S.C. § 1533(b)(2). Here, the Service followed
that command and made an vdjective feasibility determination that the
uplands surrounding the ephemeral ponds, although currently lacking
“the essential physical or biological features of critical habitat,” are “re-
storable with reasonable effort.” Final Designation, 77 Fed. Reg. at
35,135. We find no basis in the text of the statute for the “reasonable
27a
arguments on this point, Judge Feldman observed
that the Landowners “effectively ask the Court to
endorse—contrary to the express terms and scope of
the statute—a private landowner exemption from
unoccupied critical-habitat designations. This, the
Third Branch, is the wrong audience for addressing
this matter of policy.” Markle Interests, 40 F. Supp.
3d at 769 n.40. We agree. Thus, the Landowners
have not shown that the Service employed an unrea-
sonable interpretation of the ESA when it found that
Unit 1 was essential for the conservation of the
dusky gopher frog without first establishing that
Unit 1 currently supports, or in the “foreseeable fu-
ture” will support, the conservation of the dusky go-
pher frog.
We next consider the argument that that the
Service has interpreted the word “essential” unrea-
sonably because its interpretation fails to place
“meaningful limits” on the Service’s power under the
ESA. Thus, we consider whether, in designating Unit
1, the Service abided the meaningful limits that the
ESA and the agency’s implementing regulations set
on the Service’s authority to designate unoccupied
areas as critical habitat. Under the regulations in ef-
probability” test introduced by the dissent, which looks to “many factors”
including “whether a reasonable landowner would be likely to undertake
the necessary modifications.” Dissent at 13. Although a “reasonable
landowner” test has the sound of an objective test, the dissent does not
make clear how such a test would be applied in practice, nor how it
would avoid taking into account the subjective intentions of specific
landowners. For example, the dissent says that in a scenario in which a
“landowner . . . enter[s] into an agreement to modify land so that it might
be used as habitat, there would be nothing ‘subjective’ in concluding that
it is reasonably probable that the land will actually be used at habitat.”
Dissent at 13. A test that can come out differently depending on the actual
plans of specific landowners is, by definition, subjective.
28a
fect at the time that Unit 1 was designated, the Ser-
vice had to find that the species’s occupied habitat
was inadequate before it could even consider desig-
nating unoccupied habitat as critical. 50 C.F.R.
§ 424.12(e). In part, this preliminary determination
provided a limit to the term “essential” as it relates
to unoccupied areas. Unoccupied areas could be es-
sential only if occupied areas were found to be inade-
quate for conserving the species. See Bear Valley
Mut. Water Co., 790 F.3d at 994 (recognizing that the
inadequacy and essentiality requirements overlap).
Here, the Service made that threshold inadequacy
determination—a determination that the Landown-
ers do not challenge.
Next, under the ESA itself, the Service can des-
ignate unoccupied land only if it is “essential for the
conservation of the — species.” 16 =U.S.C.
§ 1532(5)(A)(ii). “Conservation” is defined as “the use
of all methods and procedures which are necessary to
bring any endangered species .. . to the point at
which the measures provided .. . are no longer nec-
essary.” Id. § 1532(3) (emphasis added). In light of
this definition, we find implausible the Landowners’
parade of horribles in which they suggest that, if the
Service can designate an area like Unit 1 as critical
habitat, it could designate “much of the land in the
United States” as well. They contend that “[bJecause
any land may conceivably be turned into suitable
habitat with enough time, effort, and resources, th[e]
[Service's] interpretation gives the Service nearly
limitless authority to burden private lands with a
critical habitat designation.” But we find it hard to
see how the Service would be able to satisfactorily
explain why randomly chosen land—whether an
empty field or, as the Landowners suggest, land cov-
ered in “buildings” and “pavement”’—would be any
29a
more “necessary” to a given species’ recovery than
any other arbitrarily chosen empty field or paved
lot.'8 Here, the Service confirmed through peer re-
view and two rounds of notice and comment a scien-
tific consensus as to the presence and rarity of a crit-
ical (and difficult to reproduce) feature—the ephem-
eral ponds—which justified its finding that Unit 1
was essential for the conservation of the dusky go-
pher frog.'®
——s
18 Nor do we see how the Service could justify designating land that ob-
jectively—that is, for scientific reasons—could never contribute to the
conservation of a species——say, for example, if the ephemeral ponds were
located within a toxic spill zone that scientists concluded could not be
remediated. Where we differ critically from the dissent is on the question
whether the ESA provides any basis for taking into account subjective
third-party intentions when determining whether land could contribute to
the conservation of a species. We hold that it does not. Under our ap-
proach, it would still be arbitrary and capricious for the Service to label as
essential land that is objectively impossible to use for conservation. See
Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.,
463 U.S. 29, 43 (1983) (finding the National Highway Traffic Safety
Administration’s rescission of a rule requiring passive restraints in auto-
mobiles arbitrary and capricious because the agency did not provide a
“rational connection between the facts found and the choice made’); see
also Arizona Cattle Growers’ Ass'n v. U.S. Fish & Wildlife, Bureau of
Land Mgmt., 273 F.3d 1229, 1243-44 (9th Cir. 2001) (finding the Fish
and Wildlife Service's issuance of an incidental-take statement arbitrary
and capricious because the evidence linking cattle grazing to an effect on
the razorback sucker was too speculative and “woefully insufficient”);
Chem. Mfrs. Ass'n v. E.P.A., 28 F.3d 1259, 1265-66 (D.C. Cir. 1994)
(finding the Environmental Protection Agency’s final rule designating a
pollutant as high risk arbitrary and capricious because “there [was] simp-
ly no rational relationship between the model [used in making the deter-
mination] and the known behavior of the hazardous air pollutant to which
it [was] applied”).
'9 We fail to see how the Service would be able to similarly justify as ra-
tional an essentiality finding as to arbitrarily chosen land. In contrast, the
dissent, similar to the Landowners, contends that “[i]t is easily conceiva-
30a
In addition, the ESA requires the Service to base
its finding of essentiality on “the best scientific data
available.” Id. § 1533(b)(2). This requirement further
cabins the Service’s power to make critical-habitat
designations. Here, the Final Designation was based
on the scientific expertise of the agency’s biologists
and outside gopher frog specialists. If this scientific
support were not in the record, the designation could
not stand.2° But that is not the situation here, and
ble that ‘the best scientific data available’ would lead scientists to con-
clude that an empty field that is not currently habitable could be altered to
become habitat for an endangered species.” Dissent at 13-14. Even as-
suming that to be true, it does not follow that scientists or the Service
would or could then reasonably call an empty field essential for the con-
servation of a species. If the field in question were no different than any
other empty field, what would make it essential? Presumably, if the field
could be modified into suitable habitat, so could any of the one hundred
or one thousand other similar fields. If the fields are fungible, it would be
arbitrary for the Service to label any single one “essential” to the conser-
vation of a species. It is only by overlooking this point that the dissent
can maintain that our approval of the Service’s reading of “essential” will
“mean| | that virtually ary part of the United States could be designated
as ‘critical habitat’ for any given endangered species so long as the prop-
erty could be modified in a way that would support introduction and sub-
sequent conservation of the species on it.” Dissent at 6 (emphasis added).
20 The dissent also takes aim at our acceptance of the Service's scientifi-
cally grounded essentiality finding in this case, contending that, under our
decision, the Service can designate any land as critical habitat whenever it
contains a single one of the “physical or biological features” essential to
the conservation of the species at issue. 16 U.S.C. § 1532(S Ai). Dis-
sent at 14-15. We create no such generalized rule. We hold only that in
this case, substantial, consensus, scientific evidence in the record sup-
ports the Service’s conclusion that the ephemeral ponds present on Unit |
are essential for the conservation of the dusky gopher frog. See, e.g., Fi-
nal Designation, 77 Fed. Reg. at 35123 (summarizing the scientific con-
sensus that the rarity of isolated, ephemeral ponds “is a limiting factor in
dusky gopher frog recovery”). The ponds cannot be separated from the
land that contains them. Thus, if the ponds are essential, then Unit 1,
which contains the ponds, is essential for the conservation of the dusky
3la
the Landowners do not challenge the consensus sci-
entific data on which the Service relied. The Land-
owners have not shown that the Service employed an
interpretation of the ESA that is inconsistent with
the meaningful limits that the ESA and the agency’s
implementing regulations set on the Service's au-
thority to designate unoccupied areas as critical hab-
itat.?!
In sum, the Landowners have not established
that the Service interpreted the ESA unreasonably—
and was thus undeserving of Chevron deference—
when it found that Unit 1 was essential for the con-
servation of the dusky gopher frog. Likewise, the
Landowners have not shown that the Service’s es-
sentiality finding failed to “satisfy minimum stand-
ards of rationality,” 10 Ring Precision, 722 F.3d at
723, which means that they have not shown that the
Service acted arbitrarily or capriciously, either.
Finally, the Landowners contend that it is im-
proper to protect Unit 1 with a critical-habitat desig-
gopher frog. In general, the dissent seeks to decouple the Service’s “es-
sentiality” finding from its scientific determination process, turning it into
a purely legal standard. We decline to do so, with the good reason that the
ESA specifically requires that critical habitat determinations be based on
“scientific data.” See 16 U.S.C. § 1533(b\{2).
21 In response to the dissent’s policy concerns about ever-expanding des-
ignations, we also note that the ESA limits critical-habitat designations on
the back end as well, because successful conservation through critical-
habitat designation ultimately works towards undesignation. See, e.g.,
Removal of the Louisiana Black Bear From the Federal List of Endan-
gered and Threatened Wildlife and Removal of Similarity of
Appearance Protections for the American Black Bear, 81 Fed. Reg.
13,124, 13,171 (March 11, 2016) (to be codified at 50 C.F.R. pt. 17) (fi-
nal rule removing Louisiana black bear from endangered species list and,
accordingly, “removing the designated critical habitat for the Louisiana
black bear”).
32a
nation when there are other ways to ensure that
Unit 1 will assist with the conservation of the gopher
frog. It is true that the Service could manage Unit 1
by purchasing the land. See 16 U.S.C. § 1534(a). But
the legal availability of other statutory conservation
mechanisms, some arguably more intrusive of pri-
vate property interests, does not undercut the Ser-
vice’s separate statutory duty to designate as critical
habitat unoccupied areas that are essential for the
conservation of the species. See id. § 1533(a)(3)(A)()
(“The Secretary .. . tu the maximum extent prudent
and determinable ... shall. . . designate any habitat
of [an endangered] species which is then considered
to be critical habitat .. ..” (emphasis added)).
In sum, the designation of Unit 1 as critical habi-
tat was not arbitrary and capricious nor based upon
an unreasonable interpretation of the ESA. The Ser-
vice reasonably determined (1) that designating oc-
cupied habitat alone would be inadequate to ensure
the conservation of the dusky gopher frog and (2)
that Unit 1 is essential for the conservation of the
frog. We thus agree with Judge Feldman: “the law
authorizes such action and .. . the government has
acted within the law.” Markle Interests, 40 F. Supp.
3d at 759-60.
C. Decision Not to Exclude Unit 1
In addition to attacking the Service's conclusion
that Unit 1 is essential for the conservation of the
dusky gopher frog, the Landowners also challenge
the Service’s conclusion that the economic impacts on
Unit 1 are not disproportionate. See Final Designa-
tion, 77 Fed. Reg. at 35,141. The Landowners argue
that because the benefits of excluding Unit 1 from
the designation clearly outweigh the benefits of in-
cluding it in the designation, the Service's decision is
33a
arbitrary and capricious. The Landowners contend
that because Unit 1 is not currently habitable by the
dusky gopher frog, the land provides no biological
benefit to the frog. They emphasize that Unit 1, by
contrast, bears a potential loss of development value
of up to $33.9 million over twenty years.
The ESA mandates that the Service “tak[e} into
consideration the economic impact . . . of specifying
any particular area as critical habitat.” 16 U.S.C.
§ 1533(b)(2). After it takes this impact into consider-
ation, the Service
may exclude any area from critical habitat if
[it] determines that the benefits of such ex-
clusion outweigh the benefits of specifying
such area as part of the critical habitat, un-
less [it] determines, based on the best scien-
tific and commercial data available, that the
failure to designate such area as critical hab-
itat will result in the extinction of the species
concerned.
Id. (emphasis added). The Service argues that once it
has fulfilled its statutory obligation to consider eco-
nomic impacts, a decision to not exclude an area is
discretionary and thus not reviewable in court. The
Service is correct. Under the APA, decisions “com-
mitted to agency discretion by law” are not review-
able in federal court. 5 U.S.C. § 701(a)(2). An action
is committed to agency discretion when there is “no
meaningful standard against which to judge the
agency's exercise of discretion.” Heckler v. Chaney,
470 U.S. 821, 830 (1985). “[I]f no judicially managea-
ble standards are available for judging how and
when an agency should exercise its discretion, then it
34a
is impossible to evaluate agency action for ‘abuse of
discretion.” Id.
The only other circuit court that has confronted
this issue has recognized that there are no manage-
able standards for reviewing the Service’s decision
not to exercise its discretionary authority to exclude
an area from a critical-habitat designation. See Bear
Valley Mut. Water Co., 790 F.3d at 989-90. It there-
fore held that the decision not to exclude is unre-
viewable. Id.; see also Bldg. Indus. Ass'n of Bay Area
v. U.S. Dep't of Commerce, No. 13-15132, 2015 WL
4080761, (9th Cir. July 7, 2015), affg No. C 11-4118,
2012 WL 6002511 (N.D. Cal. Nov. 30, 2012). Similar-
ly, every district court that has addressed this issue
has also held that the decision not to exclude is not
subject to judicial review. See Aina Nui Corp. v. Jew-
ell, 52 F. Supp. 3d 1110, 1132 n.4 (D. Haw. 2014)
(“The Court does not review the Service's ultimate
decision not to exclude .. ., which is committed to the
agency's discretion.”); Cape Hatteras Access Pres. Al-
liance v. U.S. Dep't of Interior, 731 F. Supp. 2d 15, 29
(D.D.C. 2010) (“The plain reading of the statute fails
to provide a standard by which to judge the Service's
decision not to exclude an area from critical habi-
tat.”); Home Builders Ass'n of N. Cal. v. U.S. Fish &
Wildlife Serv., No. CIV. S-05-0629, 2006 WL
3190518, at *20 (E.D. Cal. Nov. 2, 2006) (“[T]he court
has no substantive standards by which to review the
[agency's] decisions not to exclude certain tracts
based on economic or other considerations, and those
decisions are therefore committed to agency discre-
tion.”).
We see no reason to chart a new path on this is-
sue in concluding that we cannot review the Service's
decision not to exercise its discretion to exclude Unit
35a
1 from the critical-habitat designation. Section
1533(b)(2) articulates a standard for reviewing the
Service's decision to exclude an area. But the statute
is silent on a standard for reviewing the Service's de-
cision to not exclude an area. Put another way, the
section establishes a discretionary process by which
the Service may exclude areas from designation, but
it does not articulate any standard governing when
the Service must exclude an area from designation.
See Bear Valley Mut. Water Co., 790 F.3d at 989
C{W]here a statute is written in the permissive, an
agency's decision not to act is considered presump-
tively unreviewable because courts lack ‘a focus for
judicial review .. . to determine whether the agency
exceeded its statutory powers.” (quoting Heckler, 470
U.S. at 832). Thus, even were we to assume that the
Landowners are correct that the economic benefits of
exclusion outweigh the conservation benefits of des-
ignation, the Service is still not obligated to exclude
Unit 1. That decision is committed to the agency's
discretion and is not reviewable.
The Supreme Court’s recent decision in Michigan
v. EPA, 135 S. Ct. 2699 (2015), does not compel a
contrary conclusion. In Michigan, the Environmental
Protection Agency (“EPA”) had interpreted a provi-
sion of the Clean Air Act to not require the consider-
ation of costs when deciding whether to regulate
hazardous emissions from power plants. Jd. at 2706.
Although the Supreme Court held that the EPA mis-
interpreted the statute, the Court emphasized that it
was not requiring the agency “to conduct a formal
cost-benefit analysis in which each advantage and
disadvantage is assigned a monetary value.” /d. at
2711. The Court further explained that “[iJt will be
up to the Agency to decide (as always, within the lim-
36a
its of reasonable interpretation) how to account for
cost.” Id.
Unlike the provision of the Clean Air Act at issue
in Michigan, the ESA explicitly mandates “consider-
ation” of “economic unpact.” 16 U.S.C. § 1533(b)(2);
see Bennett, 520 U.S. at 172. The Service fulfilled
this requirement by commissioning an economic re-
port by Industrial Economics, Inc. That analysis es-
timated the economic impact on Unit 1, and to fur-
ther refine that analysis, it included three impact
scenarios. The report noted that Unit 1 bears a po-
tential loss of development value ranging from $0 to
$33.9 million over twenty years. See Final Designa-
tion, 77 Fed. Reg. at 35,140—41; This potential loss
depends on a number of contingencies that may or
may not arise, including future development projects,
the nature of federal agency approval that is re-
quired for those projects, and possible limits that are
imposed after any consultation that accompanies
federal agency action. As has been recently recog-
nized, the statute does not require a_ particular
methodology for considering economic impact. See
Bldg. Indus. Ass'n of Bay Area, 792 F.3d at 1032-34.
And here on appeal, the Landowners do not chal-
lenge the methodology that the Service used when
analyzing the economic impact on Unit 1; instead,
the Landowners challenge the Service’s bottom-line
conclusion not to exclude Unit 1 on the basis of that
economic impact. That conclusion is not reviewable.
Il. Commerce Clause
Having concluded that the Service’s designation
of Unit 1 as critical habitat was not arbitrary and
capricious, we must next consider the Landowners’
alternative argument that the ESA exceeds Con-
gress’s powers under the Commerce Clause. The
37a
Commerce Clause gives Congress the power “[tlo
regulate Commerce .. . among the several States.”
U.S. Const. art. 1, § 8, cl. 3. In United States v. Lopez,
the Supreme Court defined three broad categories of
federal legislation that are consistent with this pow-
er. 514 U.S. 549, 558 (1995). This case concerns the
third Lopez category—that is, whether the federal
action “substantially affect[s] interstate commerce.”
Id. at 558—59 (citations omitted).
The Landowners concede that, “properly limited
and confined to the statutory definition,” the critical-
habitat provision of the ESA is a constitutional exer-
cise of Congress’s Commerce Clause authority. They
maintain, however, that the designation of Unit 1 as
critical habitat for the dusky gopher frog exceeds the
scope of an otherwise constitutional power. Viewed
this narrowly, the designation of Unit 1 is intrastate
(not interstate) activity. The Landowners further ar-
gue that “[t]here is simply no rational basis to con-
clude that the use of Unit 1 will substantially affect
interstate commerce.” In support of this narrow
framing of the issue, the Landowners imply that it is
inappropriate to aggregate the effect of designating
Unit 1 with the effect of all other critical-habitat des-
ignations nationwide. Instead, the Landowners ar-
gue that we should analyze the commercial impact of
the Unit 1 designation independent of all other des-
ignations. But as Judge Feldman explained, “each
application of the ESA is not itself subject to the
same tests for determining whether the underlying
statute is a constitutional exercise of the Commerce
Clause.” Markle Interests, 40 F. Supp. 3d at 758. We
agree with Judge Feldman that “the [Landowners |
constitutional claim is foreclosed by binding prece-
dent.” Id.
38a
The Supreme Court has outlined four considera-
tions that are relevant when analyzing whether
Congress can regulate purely intrastate activities
under the third Lopez prong. See United States v.
Morrison, 529 U.S. 598, 609-12 (2000). First, courts
should consider whether the intrastate activity “in
question has been some sort of economic endeavor.”
Id. at 611. Second, courts should consider whether
there is an “express jurisdictional element” in the
statute that might limit its application to instances
that “have an explicit connection with or effect on in-
terstate commerce.” Jd. at 611—12. The next consid-
eration that should inform the analysis is legislative
history and congressional findings on the effect that
the subject of the legislation has on interstate com-
merce. /d. at 612. Finally. courts should evaluate
whether the link between the intrastate activity and
its effect on interstate commerce is attenuated. /d.
The Landowners’ constitutional challenge can be dis-
tilled to the question of whether we can properly an-
alyze the Unit | designation aggregated with all oth-
er critical-habitat designations nationwide. This
question falls under the first consideration articulat-
ed in Morrison. Because the Landowners concede
that the critical-habitat provision of the ESA is
“within the legitimate powers of Congress,” we need
focus on only the first consideration if we find that
aggregation is appropriate.
The first consideration is whether the regulated
intrastate activity is economic or commercial in na-
ture. Jd. at 611. The question thus arises: what is the
regulated activity that we must analyze? See GDF
Realty Invs., Ltd. v. Norton, 326 F.3d 622, 633 (5th
Cir. 2003). In GDF Realty, where we examined the
39a
“take” provision? of the ESA, we emphasized that we
had to analyze the regulation of endangered species
takes, not the commercial motivations of the plain-
tiff—developers who were challenging the statute.
Id. at 636. Applying GDF Realty here, the regulated
activity in question is the designation of Unit 1 as
critical habitat, not the Landowners’ long-term de-
velopment plans.
The next issue is whether the designation of Unit
1 as critical habitat is economic or commercial in na-
ture. “[W]hether an activity is economic or commer-
cial is to be given a broad reading in this context.” Jd.
at 638. In certain cases, an intrastate activity may
have a direct relationship to commerce and therefore
the intrastate activity alone may substantially affect
interstate commerce. Alternatively, “the regulation
can reach intrastate commercial activity that by it-
self is too trivial to have a substantial effect on inter-
state commerce but which, when aggregated with
similar and related activity, can substantially affect
interstate commerce.” United States v. Ho, 311 F.3d
589, 599 (5th Cir. 2002).
The designation of Unit 1 alone may not have a
direct relationship to commerce, but under the ag-
gregation principle, the designation of Unit 1 sur-
vives constitutional muster. Under this principle, the
intrastate activity can be regulated if it is “an essen-
tial part of a larger regulation of economic activity,
in which the regulatory scheme could be undercut
unless the intrastate activity were regulated.” Gon-
22 See 16 U.S.C. § 1532(19) (“The term ‘take’ means to harass, harm,
pursuc, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to
engage in any such conduct.”); id § 1538(a)(1)(B) (making it unlawful to
“take” an endangered species).
40a
zales v. Raich, 545 U.S. 1, 36 (2005) (quoting Lopez,
514 U.S. at 561). Thus, there are two factors we must
consider: (1) whether the provision mandating the
designation of critical habitat is part of an economic
regulatory scheme, and (2) whether designation is
essential to that scheme.
We have already concluded that the ESA is an
economic regulatory scheme. See GDF Realty, 326
F.3d at 639 (“ESA’s protection of endangered species
is economic in nature.”); id. at 640 (“ESA is an eco-
nomic regulatory scheme .. ..”). Congress enacted the
ESA to curb species extinction “as a consequence of
economic growth and development untempered by
adequate concern and conservation.” 16 U.S.C.
§ 1531(a)(1). Because the ESA’s drafters sought to
protect the “incalculable” value of biodiversity, the
ESA prohibits interstate and foreign commerce in
endangered species. See id. § 1538(a)(1)(E)-+F); GDF
Realty, 326 F.3d at 639 (citation omitted). Finally,
habitat protection and management—which often in-
tersect with commercial development—underscore
the economic nature of the ESA and its critical-
habitat provision. See 16 U.S.C. § 1533(f)(1)(A) (re-
quiring that the Secretary prioritize implementing
recovery plans for “those species that are, or may be,
in conflict with construction or other development
projects or other forms of economic activity’); see also
id. § 1533(a)(1)(B) (listing the “overutilization [of a
species] for commercial . . . purposes” as one of the
factors endangering or threatening species).
But it is not sufficient that the ESA is an eco-
nomic regulatory scheme. The critical-habitat provi-
sion must also be an essential component of the ESA.
If the process of designating critical habitat is “an
essential part of a larger regulation of economic ac-
4la
tivity,” then whether that process—designation—
“ensnares some purely intrastate activity is of no
moment.” Raich, 545 U.S. at 22. “[T]he de minimis
character of individual instances arising under that
statute is of no consequence.” /d. at 17 (citations and
internal quotation marks omitted). When Congress
has regulated a class of activities, we “have no power
to excise, as trivial, individual instances of the class.”
Id. at 23 (citation and internal quotation marks
omitted). We conclude that designating critical habi-
tat is an essential part of the ESA’s economic regula-
tory scheme.
This conclusion is consistent with our analysis of
the ESA’s “take” provision in GDF Realty. There, we
held that “takes” of an endangered species that lived
only in Texas could be aggregated with takes of other
endangered species nationwide to survive a Com-
merce Clause challenge. GDF Realty, 326 F.3d at
640—41. That case concerned the Service’s regulation
of takes of six subterranean endangered species (“the
Cave Species”) located solely in two counties in Tex-
as. Id. at 625. Similar to the Landowners here, the
owners of some of the land under which these species
lived wanted to develop the land into a commercial
and residential area; they sued the government,
claiming that the take provision of the ESA, as ap-
plied to the Cave Species, exceeded the boundaries of
the Commerce Clause. Jd. at 624, 626. Addressing
this claim, we upheld the take provision. We ex-
plained that, in the aggregate, takes of all endan-
gered species have a substantial effect on interstate
commerce. See id. at 638-40. Because of the “inter-
dependence of [all] species,” we held that regulating
the takes of the Cave Species was an essential part
of the larger regulatory scheme of the ESA, in that,
without this regulation, the regulatory scheme could
A2a
be undercut by piecemeal extinctions. Jd. at 639—40.
Every other circuit court that has addressed similar
challenges has also upheld the ESA as a valid exer-
cise of Congress’s Commerce Clause power. See
Gibbs v. Babbitt, 214 F.3d 483, 497-98 (4th Cir.
2000); San Luis & Delta~Mendota Waier Auth. v.
Salazar, 638 F.3d 1163, 1177 (9th Cir. 2011); Wyo-
ming v. U.S. Dep't of Interior, 442 F.3d 1262, 1264
(10th Cir. 2006) (per curiam), affg 360 F. Supp. 2d
1214, 1240 (D. Wyo. 2005); Ala._Tombigbee Rivers
Coal. v. Kempthorne, 477 F.3d 1250, 1274 (11th Cir.
2007); Rancho Viejo, LLC v. Norton, 323 F.3d 1062,
1080 (D.C. Cir. 2003); Nat'l Ass’n of Home Builders v.
Babbitt, 130 F.3d 1041, 1049—57 (D.C. Cir. 1997).
The Landowners have not identified any federal
court of appeals that has held otherwise.
This caselaw compels the same conclusion here.
For one, we see no basis to distinguish the ESA’s
prohibition on “takes” from the ESA’s mandate to
designate critical habitat. As Congress recognized,
one of the primary factors causing a species to be-
come endangered is “the present or threatened de-
struction, modification, or curtailment of its habitat
or range.” 16 U.S.C. § 1533(a)(1)(A). Because of the
link between species survival and habitat preserva-
tion, the statute imposes a mandatory duty on the
Service to designate critical habitat for endangered
species “to the maximum extent prudent and deter-
minable.” Jd. § 1533(a)(3)(A). Indeed, the ESA in-
cludes an express purpose of conserving “the ecosys-
tems upon which endangered species . . . depend.” Jd.
§ 1531(b); see also GDF Realty, 326 F.3d at 640 (“In
fact, according to Congress, the ‘essential purpose’ of
the ESA is ‘to protect the ecosystems upon which we
and other species depend.” (quoting H.R. Rep. No.
93-412, at 10)). Allowing a particular critical habi-
43a
tat—one that the Service has already found to be es-
sential for the conservation of the species—to escape
designation would undercut the ESA’s scheme by
leading to piecemeal destruction of critical habitat.
We therefore conclude that the critical-habitat provi-
sion is an essential part of the ESA, without which
the ESA’s regulatory scheme would be undercut. Cf.
Ala.—Tombigbee Rivers Coal., 477 F.3d at 1274 (hold-
ing that “the ‘comprehensive scheme’ of species pro-
tection contained in the Endangered Species Act has
a substantial effect on interstate commerce” and that
the process of listing species as endangered or
threatened is “an essential part of that larger regula-
tion of economic activity” (citation and internal quo-
tation marks omitted)).
Given this conclusion, the designation of Unit 1
may be aggregated with all other critical-habitat des-
ignations. As Judge Feldman correctly observed,
“[w]here the class of activities is regulated and that
class is within the reach of federal power, the courts
have no power to excise, as trivial, individual in-
stances of the class.” Markle Interests, 40 F. Supp. 3d
at 759 (alteration in original) (quoting Raich, 545
U.S. at 23) (internal quotation marks omitted).
“(W]hen a general regulatory statute bears a sub-
stantial relation to commerce, the de minimis char-
acter of individual instances arising under that stat-
ute is of no consequence.” Raich, 545 U.S. at 17 (cita-
tions and internal quotation marks omitted). We
therefore will not look at the designation of Unit 1 in
isolation, but instead we consider it aggregated with
all other critical-habitat designations. Judge Feld-
man reached the same conclusion, explaining that,
“lalggregating the regulation of activities that ad-
versely modify the frog’s critical habitat’—including
the isolated designation of Unit 1—“with the regula-
44a
tion of activities that affect other listed species’ habi-
tat, the designation of critical habitat by the [Ser-
vice] is a constitutionally valid application of a con-
stitutionally valid Commerce Clause regulatory
scheme.” Markle Interests, 40 F. Supp. 3d at 759. Be-
cause the Landowners concede that the critical-
habitat provision of the ESA is a valid exercise of
Congress’s Commerce Clause authority, we can like-
wise conclude that the application of the ESA’s criti-
cal-habitat provision to Unit 1 is a constitutional ex-
ercise of the Commerce Clause power.”°
3 Although the Landowners’ concession truncates our analysis, we ob-
serve that the other three considerations articulated in Morrison also
weigh in favor of concluding that the critical-habitat provision of the ESA
is constitutional as applied to the dusky gopher frog. Although there is no
jurisdictional element in the statute limiting its application to instances af-
fecting interstate commerce, the “interdependence of species” under-
scores that critical-habitat designations affect interstate commerce. GDF
Realty, 326 F.3d at 640. In this sense, the ESA’s critical-habitat provision
“is limited to instances which ‘have an explicit connection with or effect
on interstate commerce.’” /d. (quoting Morrison, 529 U.S. at 611-12).
Next, the congressional findings, legislative history, and statutory pro-
visions indicate that the regulated activity has an effect on interstate
commerce. See 16 U.S.C. § 1531(a)(1) (“The Congress finds and declares
that . . . various species of fish, wildlife, and plants in the United States
have been rendered extinct as a consequence of economic growth and de-
velopment untempered by adequate concern and conservation . . ..”); id
§ 1533(a)(1)(A){B) (acknowledging “the present or threatened destruc-
tion, modification, or curtailment of [a species’s] habitat or its range” and
the “overutilization [of species] for commercial . . . purposes” as factors
leading to species endangerment); Tenn. Valley Auth., 437 U.S. at 177-78
(summarizing the legislative history of the ESA); Gibbs, 214 F.3d at 495
(discussing the legislative history of the ESA and the possibility of re-
newing a commercial market in a species once it is no longer endangered
or threatened (citing S. Rep. No. 91-526, at 3 (1969))); see also San Luis
& Delta—Mendota Water Auth., 638 F.3d at 1176.
Finally, the link between critical-habitat designation and its effect on
interstate commerce is not too attenuated. The ESA is economic in na-
45a
Ill. National Environmental Policy Act
Finally, the Landowners contend that the Service
violated NEPA by failing to prepare an environmen-
tal impact statement before designating Unit 1 as
critical habitat. If proposed federal action will “sig-
nificantly affect [| |] the quality of the human envi-
ronment,” NEPA requires the relevant federal agen-
cy to provide an environmental impact statement for
the proposed action. 42 U.S.C. § 4332(2)(C). In Sab-
ine River Authority, we explained that an environ-
mental impact statement “is not required for non
major action or a major action which does not have
significant impact on the environment.” 951 F.2d at
677 (citation and internal quotation marks omitted).
This standard necessarily means that if federal ac-
tion will not result in any change to the environment,
then the action does not trigger NEPA’s impact-
statement requirement. See id. at 679 (noting that
federal action “did not effectuate any change to the
environment which would otherwise trigger the need
to prepare an [environmental impact statement]’);
see also Metro. Edison Co. v. People Against Nuclear
Energy, 460 U.S. 766, 774 (1983) (explaining that no
ture, and Congress has made critical-habitat designation a mandatory
component of the regime. See 16 U.S.C. § 1533(aX3KA)i) (stating that
the Service “shall . . . designate any habitat of [an endangered] species
which is then considered to be critical habitat” (emphasis added)). More-
over, as this case highlights, any future regulation of Unit 1 or other criti-
cal habitat would occur if the Landowners’ commercial development
plans triggered Section 7 consultation. Thus, the link to interstate com-
merce is not too attenuated for purposes of Commerce Clause analysis.
See Morrison, 529 U.S. at 611 (explaining that the statutes challenged in
Lopez and Morrison fell outside Congress’s Commerce Clause authority
because “neither the actors nor their conduct ha[d] a commercial charac-
ter, and neither the purposes nor the design of the statute ha[d] an evident
commercial nexus” (citation and internal quotation marks omitted)). For
these additional reasons, the application of the ESA’s critical-habitat pro-
vision is constitutional as applied to the dusky gopher frog.
Aba
environmental impact statement is required if health
damage stemming from federal action “would not be
proximately related to a change in the physical envi-
ronment”); City of Dallas, Tex. v. Hall, 562 F.3d 712,
723 (5th Cir. 2009) (holding that an environmental
impact statement was not required when the federal
action “[did] not effect a change in the use or charac-
ter of land or in the physical environment’).
Judge Feldman correctly held that the designa-
tion of Unit | does not trigger NEPA’s impact-
statement requirement because the designation
“does not effect changes to the physical environ-
ment.” Markle Interests, 40 F. Supp. 3d at 768. The
designation also does not require the Landowners to
take action as a result of the designation. As Judge
Feldman correctly observed, “the ESA statutory
scheme makes clear that [the Service] has no author-
ity to force private landowners to maintain or im-
prove the habitat existing on their land.” Jd. (foot-
note and citation omitted). We agree that the Service
was not required to complete an environmental im-
pact statement before designating Unit 1 as critical
habitat for the dusky gopher frog.
Alternatively, this claim is resolved on the
threshold issue of the Landowners’ standing to raise
this NEPA claim. A plaintiff bringing a claim under
NEPA must not only have Article III standing to
pursue the claim, but also fall within the zone of in-
terests sought to be protected under the statute. See
Lujan v. Nat’ Wildlife Fed’n, 497 U.S. 871, 883
(1990); Sabine River Auth., 951 F.2d at 675 (recog-
nizing that the zone-of-interests test applies to chal-
leages under NEPA). Other circuit courts have held
that “a plaintiff who asserts purely economic injuries
does not have standing to challenge an agency action
47a
under NEPA.” Nev. Land Action Ass'n v. U.S. Forest
Serv., 8 F.3d 713, 716 (9th Cir. 1993) (citing cases
from the Fourth, Eighth, Ninth, and D.C. Circuits).
Consistent with this conclusion, we have observed in
dicta that a “disappointed contractor” who was in-
jured by an easement that prevented devclopment
opportunities would not have standing under the
zone-of-interests test because “NEPA was not de-
signed to protect contractors’ rights: it was designed
to protect the environment.” Sabine River Auth., 951
F.2d at 676. The Landowners’ asserted injuries here
are similarly economic, not environmental: lost fu-
ture development and lost property value. These
economic injuries do not fall within the zone of inter-
ests protected by NEPA, and the Landowners there-
fore lack standing to sue to enforce NEPA’s impact-
statement requirement.
CONCLUSION
For the reasons stated above, we AFFIRM the
judgment of the district court.
PRISCILLA R. OWEN, Circuit Judge, dissenting:
There is a gap in the reasoning of the majority
opinion that cannot be bridged. The area at issue is
not presently “essential for the conservation of the
jendangered] species”! because it plays no part in
the conservation of that species. Its biological and
physical characteristics will not support a dusky go-
pher frog population. There is no evidence of a rea-
sonable probability (or any probability for that mat-
ter) that it will become “essential” to the conserva-
tion of the species because there is no evidence that
the substantial alterations and maintenance neces-
sary to transform the area into habitat suitable for
the endangered species will, or are likely to, occur.
Land that is not “essential” for conservation does not
meet the statutory criteria for “critical habitat.”?
The majority opinion interprets the Endangered
Species Act* to allow the Government to impose re-
strictions on private land use even though the land:
is not occupied by the endangered species and has
not been for more than fifty years; is not near areas
inhabited by the species; cannot sustain the species
without substantial alterations and future ar nual
maintenance, neither of which the Government has
the authority to effectuate, as it concedes; and does
not play any supporting role in the existence of cur-
' 16 U.S.C. § 1532(5 Ai) (“The term ‘critical habitat’ for a threatened
species means . . . specific areas outside the geographical area occupied
by the species at the time it is listed [as endangered], upon a determina-
tion by the Secretary that such areas are essential for the conservation of
the species.”’).
2 Id.
3 Jd. § 1531 et seq.
AQa
rent habitat for the species. If the Endangered Spe-
cies Act permitted the actions taken by the Govern-
ment in this case, then vast portions of the United
States could be designated as “critical habitat” be-
cause it is theoretically possible, even if not probable,
that land could be modified to sustai
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