Amicus Curiae Brief — Weyerhaeuser Co. v. U.S. Fish & Wildlife Serv., 139 S. Ct. 45 (2018) (No. 17-71)

US.

eme

FILED

AUG 1 1 2017

Nos. 17-71, 17-74

RECORD — —

' AND In The | |_ OFFICE OF THE CLERK

— Supreme Court of the Gnited States

2

WEYERHAEUSER COMPANY,

Petitioner,

Vv.

UNITED STATES FISH AND WILDLIFE SERVICE, e¢ ai.,

Respondents.

.

MARKLE INTERESTS, L.L.C., et ai.,

Petitioners,

Vv.

UNITED STATES FISH AND WILDLIFE SERVICE, et ai.,

Respondents.

°

On Petitions For Writ Of Certiorari

To The United States Court Of Appeals

For The Fifth Circuit

+

AMICUS CURIAE BRIEF OF

MOUNTAIN STATES LEGAL FOUNDATION

IN SUPPORT OF PETITIONERS

+

STEVEN J. LECHNER

Counsel of Record

GINA M,. CANNAN

MOUNTAIN STATES LEGAL FOUNDATION

2596 South Lewis Way

Lakewood, Colorado 80227

(303) 292-2021

lechner@mountainstateslegal.com

gina@mountainstateslegal.com

Attorneys for Amicus Curiae

i

TABLE OF CONTENTS

ee CO BT Be I vesinctesescccesensesnsnnsevenses

IDENTITY AND INTEREST OF AMICUS CU-

FEPE PITS, cosy cencuvinsrcsvinceninnnniieieniinumesimvitanes

I.

IT.

CERTIORARI SHOULD BE GRANTED TO

DETERMINE WHETHER AN AGENCY IS

ENTITLED TO DEFERENCE WHEN ITS

INTERPRETATION OF THE STATUTE

PUSHES THE OUTER LIMITS OF THE

COMMERCE CLAUSE AND VIOLATES

PRINCIPLES OF FEDERALISM ................

CERTIORARI SHOULD BE GRANTED

BECAUSE THE PANEL MAJORITY’S AP-

PLICATION OF THE “SUBSTANTIAL EF-

FECTS” TEST WOULD PROVIDE

NO STOPPING POINT TO FEDERAL

AGENCIES’ REGULATORY AUTHORITY

CPP EE FI PORE ED BRITE vec cccesccccesoseceseveosenses

IE isas contuitoosnisecensndntstensiendionmiicniinedediond

il

TABLE OF AUTHORITIES

CASES

Arizona Cattle Growers Ass'n v. Salazar, 606

Re SEE IE CIEE... cocceupssisiintaidagibeadibassinntpenans 10

Bond v. United States, 134 S. Ct. 2077 (2014) ...6, 7, 12

Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837

SETI iain olitadelaviaihceesahaentudeliattachidlistieibaeiiiatagsbanblaioadeniil 8,9

Garcia v. Vanguard Car Rental USA, Inc., 540

ee ee CE Sie siccctsccnccessocsuscodioneneuueene 15

GDF Realty Investments, Ltd. v. Norton, 326

I I I oc cccasdniniietiodssnousibccienteemnses 17

GDF Realty Investments, Lid. v. Norton, 362

ee IE TI I erirsinccesinsonsicunensomenstoeds 18, 19

Gibbs v. Babbitt, 214 F.3d 483 (4th Cir. 2000) ... 16, 17, 18

Gonzales v. Raich, 545 U.S. 1 (2005) ...... cece eeeee. 8

Gregory v. Ashcroft, 501 U.S. 452 (1991) ....02.........208 12

Gulf Oil Corp. v. Copp Paving Co., Inc., 419 U.S.

ITT xyicevtsinspacndceiaticdhensdatebehaimapinisabasiseausnidaaabipielabvieetnidias 20

Home Builders Ass’n of N. Cal. v. U.S. Fish &

Wildlife Serv., 616 F.3d 983 (9th Cir. 2010)............ 10

L.S. Starrett Co. v. FE.R.C.,650 F.3d 19 (1st Cir.

SEIT scietinieehdeiatteieh epee sila isedeevelelaaiehiiagadieteaiaaghiatiaediietadaleesti 15

Marbury v. Madison, 5 U.S. (1 Cranch) 137

ED tiniisintcnatietitheesensiinnsdenantmeenaibinnionmibatnnes 8, 21

Markle Interests, LLC v. U.S. Fish and Wildlife

Serv., 40 F. Supp. 3d 744 (E.D. La. 2014) .........000..... 4

ill

TABLE OF AUTHORITIES ~ Continued

Page

Markle Interests, LLC v. U.S. Fish and Wildlife

Serv., 827 F.3d 452 (5th Cir. 2016).................. passim

Markle Interests, LLC v. U.S. Fish and Wildlife

Serv., 848 F.3d 635 (5th Cir. 2017)............ 4,5,10, 11

McCulloch v. Maryland, 17 U.S. (4 Wheat) 316

PanIIT iniiaiinacunsihdtintasbinitinintinindiphetictidlienibnsaibebinntniadsteitecsietes 7

Natl Ass’n of Home Builders v. Babbitt, 130 F.3d

I SE, SET cintrsccessnsisciseatesthbniatisiniadeesewaes 16, 18

Natl Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct.

ERE I ET eT So 2, 12, 13, 20, 21

New York v. United States, 505 U.S. 144 (1992)......... 12

NLRB v. Jones & Laughlin Steel Corp., 301 U.S.

CII P csniiccicssisidissasiananiactnainniniitanisenanitunetvenindenmeten 16

People for the Ethical Treatment of Property

Owners v. U.S. Fish and Wildlife Serv., 852

Se IG CE iciecsecckicacousesiinnsenietvcsocssees 2,17

Rancho Viejo v. Norton, 323 F.3d 1062 (D.C. Cir.

Span stiiciaheitesiiliclabcssacriahaniaeaspoistieieiininicbabisuctasdaeibiniaaipanne sedate 17

Rapanos v. United States, 547 U.S. 715 (2006) .....11, 12

San Luis & Delta-Mendota Water Authority v.

Salazar, 638 F.3d 1163 (9th Cir. 2011).........00.0000..... 2

Shuler v. Babbitt, 49 F. Supp. 2d 1165 (D. Mont.

SIE T iiiiinicdicicdiiecitinintitienacaedeniinmmeaseiiiianateiniiaitniaiaanieens 2

Solid Waste Agency of N. Cook County v. U.S. Army

Corps of Eng’rs, 531 U.S. 159 (2001)....... 9,10, 11,18

Taylor v. United States, 136 S. Ct. 2074 (2016) ......... 14

iv

TABLE OF AUTHORITIES — Continued

Page

United States v. Ho, 311 F.3d 589 (5th Cir. 2002)....... 15

United States v. Lopez, 514 U.S. 549 (1995)....... passim

United States v. McGuire, 178 F.3d 203 (3d Cir.

PTT iniilisdihcdamdistecdlinnusgetanebbtnntiadbiehinbébiesmeions 15, 22

United States v. Morrison, 529 U.S. 598 (2000).... passim

Wickard v. Filburn, 317 U.S. 111 (1942) ....0.00000000000.. 14

CONSTITUTIONAL PROVISIONS

en MS NI Th OE OE I incsancinsccoticosecomstensetianiane passim

STATUTES

Endangered Species Act, 16 U.S.C. § 1531 et seq.

ee ts Or NII sicininiccnsensennneeiiisserceuesdeverees 10

Se ls Oe IID inc, csehssinestdcidiendeneentninescineenseumniens 8

FEDERAL REGISTER

77 Fed. Reg. 35,118 (June 12, 2012). 00.0... eeeeeeee 3

81 Fed. Reg. 7,414 (Feb. 11, 2016)... eee 11

RULES

I CII BINED... sicicenticnceesenciiemennoniscoonnnnmnss 1

SN CAUNIDG NUIT BF I) cisciisscenccccecisicsccccescsstsacsvubss 1

SOUND GING BONNIE BPE SO ceitecsccsepscsnctictnchindssntiicectniansions 1

v

TABLE OF AUTHORITIES — Continued

OTHER AUTHORITIES

Arthur B. Mark, III, Currents in Commerce

Clause Scholarship Since Lopez: A Survey, 32

oS ST Cg Cees Fs

Brannon P. Denning & Glenn H. Reynolds, Rul-

ings and Resistance: The New Commerce

Clause Jurisprudence Encounters the Lower

Courts, 55 Ark. L. Rev. 1253 (2003)...................

Comment, Turning the Endangered Species Act

Inside Out?, 113 Yale L.J. 947 (2004) ................

Jonathan H. Adler, Judicial Federalism and the

Future of Federal Environmental Regulation,

90 Towa L. Rev. 377 (2006) ...<ccccocscescosceccoccveeseccss

Lee Pollack, The “New” Commerce Clause: Does

Section 9 of the ESA Pass Constitutional Mus-

ter After Gonzales v. Raich?, 15 N.Y.U. Envtl.

Lacs BO COT ) ..scscnctnsisijinintssddiaeindoienseidaiadiiaaiin

Richard A. Epstein, The Proper Scope of the

Commerce Power, 73 Va. L. Rev. 1387 (1987) ....

Page

seoes 22

1

AMICUS CURIAE BRIEF OF

MOUNTAIN STATES LEGAL FOUNDATION

IN SUPPORT OF PETITIONERS

Pursuant to Supreme Court Rule 37.2, Mountain

States Legal Foundation (““MSLF”) respectfully sub-

mits this amicus curiae brief, on behalf of itself and its

members, in support of Petitioners.’

+

IDENTITY AND INTEREST

OF AMICUS CURIAE

MSLF is a nonprofit, public-interest legal founda-

tion organized under the laws of the State of Colorado.

MSLF is dedicated to bringing before the courts those

issues vital to the defense and preservation of individ-

ual liberties, the right to own and use property, the free

enterprise system, and limited and ethical govern-

ment.

Central to the notion of a limited government is

the constitutional principle of enumerated powers:

those powers not explicitly delegated to the federal

government are reserved to the States and the people.

These limited powers include Congress’s power to

' Pursuant to Supreme Court Rule 37.2(a), all parties con-

sent to the filing of this amicus curiae brief and received notice at

least 10 days prior to the due date. Pursuant to Supreme Court

Rule 37.6, the undersigned further affirms that no counsel for a

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

entity, other than MSLF, its members, or its counsel, made a mon-

etary contribution specifically for the preparation or submission

of this brief.

2

make rules regulating interstate commerce, as con-

ferred by the Commerce Clause. U.S. Const. art. I, § 8,

cl. 3. Legislation that reaches beyond Congress’s con-

stitutional authority results in a federal government

that is no longer limited and ethical, and further

erodes individual liberty, the right to own and use

property, and the free enterprise system. Accordingly,

MSLF has been actively involved in litigation chal-

lenging Congress’s power under the Commerce Clause.

E.g., Nat'l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct.

2566 (2012) (“NFIB”) (amicus curiae).

MSLF has also been actively involved in the

proper interpretation and application of the Endan-

gered Species Act (“ESA”), 16 U.S.C. § 1531 et seq. E.g.,

Shuler v. Babbitt, 49 F. Supp. 2d 1165 (D. Mont. 1998)

(successfully represented livestock operator charged

with unlawfully taking a grizzly bear). More specifi-

cally, MSLF has sought to prevent the ESA from reach-

ing activities on private land and purely intrastate

species. See, e.g., People for the Ethical Treatment of

Property Owners v. U.S. Fish and Wildlife Serv., 852

F.3d 990 (10th Cir. 2017) (“PETPO”): San Luis & Delta-

Mendota Water Authority v. Salazar, 638 F.3d 1163

(9th Cir. 2011).

If the panel majority’s expansive interpretation of

the U.S. Fish and Wildlife Service’s (“FWS”) authority

under the ESA is allowed to stand, nothing will be be-

yond the reach of federal regulation, and the principles

of federalism enunciated by this Court’s distinction be-

tween “what is truly national and what is truly local”

3

in United States v. Lopez, 514 U.S. 549, 567-68 (1995)

will be a dead letter.

J

STATEMENT OF THE CASE

On June 12, 2012, the FWS designated 1,544 acres

of private land in Louisiana, owned and controlled by

Petitioners, as critical habitat for the dusky gopher

frog, an endangered species found solely in Mississippi.

Markle Interests, LLC v. U.S. Fish and Wildlife Serv.,

827 F.3d 452, 459 (5th Cir. 2016); 77 Fed. Reg. 35,118

(June 12, 2012). This designation was made despite the

land being unoccupied and uninhabitable by the dusky

gopher frog, as the land only contained one of the three

“primary constituent elements” (/.e., biological or phys-

ical features) necessary for the frog’s survival. 77 Fed.

Reg at 35,131, 35,135. For the frog to survive on Peti-

tioners’ uninhabitable land (“Unit 1”), significant mod-

ifications would be required, including burning down

the existing loblolly forest, which is currently used for

timber harvest, and replanting a long leaf pine forest.

Id. at 35,132, 35,135. The FWS admits that Petitioners

are not inclined to take such action, and cannot be

forced to do so. Id. at 35,123, 35,129. The designation

of Unit 1, by the FWS’s own estimation, will cost the

Petitioners up to $34 million in lost revenue. Jd. at

35,141. Despite this heavy financial burden and

knowledge of Petitioners’ unwillingness to cease tim-

ber development, burn down the existing forest, and

replant a new forest; FWS refused to exclude Unit 1

from the designation of critical habitat in favor of the

4

unquantifiable biological benefits that may occur if Pe-

titioners were to change their minds. /d.; Markle Inter-

ests, 827 F.3d at 466.

Petitioners challenged the critical habitat desig-

nation, arguing, inter alia, that the designation was

not a constitutional application of Congress’s authority

under the Commerce Clause. Markle Interests, LLC v.

U.S. Fish and Wildlife Serv., 40 F. Supp. 3d 744, 758

(E.D. La. 2014). After stating that the “Court is

tempted to agree” that the FWS exceeded its constitu-

tional authority by the “odd .. . agency action” of des-

ignating uninhabitable lands, the district court

deferred to the agency action and therefore found itself

“without power” to overturn it. Jd. at 758-59.

On appeal, a divided pane! of the Fifth Circuit af-

firmed, finding that the “regulated activity in question

is the designation of Unit 1 as critical habitat,” and

therefore, all critical habitat designations may be ag-

gregated to find a substantial effect on interstate com-

merce. Markle Interests, 827 F.3d at 476. Determining

that the ability to designate critical habitat in general

is essential to the ESA, which it found to be an “eco-

nomic regulatory scheme[,)” the panel upheld the

constitutionality of the designation of Unit 1. Id. at

476-79. Judge Owen dissented on the basis that, inter

alia, land cannot statutorily be “essential” to the con-

servation of the species if it is uninhabitable by that

species. Id. at 481, 483-85.

Petitioners filed a petition for rehearing en banc,

which was denied by a sharply divided court. Markle

5

Interests, LLC v. U.S. Fish and Wildlife Serv., 848 F.3d

635 (5th Cir. 2017). Judge Jones, writing in dissent for

the six-judge minority, explained that there are simply

no “real limiting principles” in the panel majority’s

opinion: “[I}f critical habitat designation of unoccupied

areas depends only on the existence of one feature es-

sential to a species’ conservation, then . . . the Service

has free rein to regulate any land that contains any

single feature essential to some species’ conservation.”

Id. at 645, 649.

°

SUMMARY OF ARGUMENT

The absence of a limiting principle in the panel

majority's opinion violates the Commerce Clause of the

U.S. Constitution and necessitates this Court’s review.

According to the panel majority, the FWS may regulate

any land that could, with enough time, money, and ef-

fort, be transformed into critical habitat. This interpre-

tation would turn the FWS’s already substantial power

to protect threatened or endangered species and their

habitats into a general police power akin to that re-

served to the states. This Court has repeatedly held

that, however broadly the Commerce Clause may be

construed, it may not be read so as to eviscerate the

distinction between what is truly national and what is

truly local. There are outer boundaries to Congress’s

powers under the Commerce Clause, and, when an

agency pushes the limits of those boundaries, its inter-

pretation of the statute at issue is not accorded defer-

ence. The panel majority both failed to suggest a

6

convincing limiting principle to its holding and im-

properly deferred to the FWS’s interpretation of its

own power.

The panel majority compounded its flawed analy-

sis by determining that the FWS’s designation of Unit

1 fell within Congress’s Commerce Clause power be-

cause, in the aggregate, critical habitat designations

generally have a substantial effect on interstate com-

merce. By holding that the regulated activity to be ag-

gregated is the regulation itself, the panel majority

effectively insulated all species listings and critical

habitat designations under the ESA from Commerce

Clause challenges. Because the implications of shield-

ing federal agency actions from judicial scrutiny under

the Commerce Clause are far-reaching, this Court

should grant certiorari.

S

ARGUMENT

I. CERTIORARI SHOULD BE GRANTED TO

DETERMINE WHETHER AN AGENCY IS

ENTITLED TO DEFERENCE WHEN ITS

INTERPRETATION OF THE STATUTE

PUSHES THE OUTER LIMITS OF THE

COMMERCE CLAUSE AND VIOLATES

PRINCIPLES OF FEDERALISM.

Our federal government is one of limited, enumer-

ated powers; “the States and the people retain the re-

mainder.” Bond v. United States, 134 8S. Ct. 2077, 2086

7

(2014). The States have “broad authority to enact leg-

islation for the public good — what we have often called

a ‘police power.’ The Federal Government, by contrast

has no such authority and ‘can exercise only the pow-

ers granted to it.’” Jd. (quoting Lopez, 514 U.S. at 567,

and McCulloch v. Maryland, 17 U.S. (4 Wheat) 316, 405

(1819)). Congress has the enumerated power “|t|o reg-

ulate Commerce with foreign Nations and among the

several States, and with the Indian Tribes.” U.S. Const.

art. I, § 8, cl. 3. The Commerce Clause power is limited

in scope and “is subject to outer limits.” Lopez, 514 U.S.

at 557. One such limitation inherent in the Commerce

Clause is that federal regulation may not reach activ-

ity that is purely local, lest Congress’s “authority un-

der the Commerce Clause [be converted] to a general

police power of the sort retained by the States.” Jd. at

567-68 (There must be “a distinction between what is

truly national and what is truly local.”). Although some

of this Court’s decisions “have taken long steps” down

that road in “giving great deference to congressional

action|,|” id., this Court has maintained that the

“Founders denied the National Government” a general

police power. United States v. Morrison, 529 U.S. 598,

618 (2000).

In derogation of this essential limitation on fed-

eral power, the panel majority determined that, under

the ESA, the FWS could regulate private land located

miles away from a species and its existing or potential

habitat. Markle Interests, 827 F.3d at 466-67. Unit 1

bears no relation to the species sought to be protected,

8

other than that it contains, at most, one element nec-

essary for survival of the species —- “ephemeral ponds.”

Id. Even worse, the panel majority reached this conclu-

sion by deferring to the FWS’s reading of the ESA — a

reading that interprets the ESA’s requirement that

critical habitat be “essential for the conservation of the

species” to include non-habitat. Jd. at 467-68 (citing

Chevron, U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984)); 16

US.C. § 1532(5)(A)(ii). The panel majority’s opinion is

so deeply flawed that it crashes headlong into the outer

limits of Commerce Clause authority, breezing by any

federalism concerns in the process.

Since at least the time of Marbury v. Madison, 5

U.S. (1 Cranch) 137 (1803), this Court has recognized

that Congress’s enumerated powers, granted by the

Constitution, place discernable limitations on its

power to legislate, and when such legislation results in

excessive federal encroachment, it is repugnant to the

Constitution and must be stricken down. /d. at 177. In

the context of the enumerated Commerce Clause

power, this Court has repeatedly emphasized that the

ability to regulate interstate commerce is a limited

power, and is not analogous to the States’ general po-

lice power. Lopez, 514 U.S. at 566. This Court “en-

force{[s] the ‘outer limits’ of Congress’s Commerce

Clause authority not for |its} own sake, but to protect

historic spheres of state sovereignty from excessive

federal encroachment and thereby to maintain the dis-

tribution of power fundamental to our federalist sys-

tem of government.” Gonzales v. Raich, 545 U.S. 1, 42

9

(2005) (O’Connor, J., dissenting) (quoting Lopez, 514

U.S. at 557).

Here, the panel majority's use of Chevron defer-

ence to accept the FWS’s interpretation of the ESA

pushes the boundaries of the Commerce Clause. In

Solid Waste Agency of N. Cook County v. U.S. Army

Corps of Eng’rs, 531 U.S. 159 (2001) (*SWANCC”), this

Court considered whether the agency’s interpretation

of “waters of the United States” as including seasonal

ponds was entitled to deference when such interpreta-

tion “invokes the outer limits of Congress’|s] power|.|”

Id. at 172-73. This Court determined that no deference

was owed to the agency’s interpretation because “the

administrative interpretation alters the federal-state

framework by permitting federal encroachment on a

traditional state power|,)” specifically, “impingement of

the States’ traditional and primary power over land

and water use.” Jd. at 173-74. Moreover, unless there

was “a clear indication that Congress intended” the

agency “to push the limit of congressional authority(,|”

the agency’s interpretation was not entitled to defer-

ence. /d. at 173. This Court then held the agency inter-

pretation unconstitutional because, in regulating

nonnavigable, isolated, intrastate waters, the agency

exceeded Congress’s powers under the Commerce

Clause. Id. at 172-73.

This case presents almost identical concerns.

Here, the FWS has interpreted its authority under the

ESA in such an “unprecedented and sweeping” manner

that “vast portions of the United States could be desig-

nated as ‘critical habitat’ because it is theoretically

10

possible, even if not probable, that the land could be

modified to sustain the introduction or reintroduction

of endangered species.” Markle Interests, 827 F.3d at

481, 485 (Owen, J., dissenting). Far from being a “clear

indication” from Congress that it intended to grant the

FWS the authority to designate non-habitat as critical

habitat, see SWANCC, 531 US. at 173, the “language

of the [ESA] does not permit such an expansive inter-

pretation and consequent overreach by the Govern-

ment.” Markle Interests, 827 F.3d at 481 (Owen, J.,

dissenting). In fact, other courts that have considered

the requirements for designation of unoccupied critical

habitat have concluded that Congress intended the

designation to be “more demanding,” and a “more on-

erous procedure” than designating occupied critical

habitat, which requires all of the physical or biological

features necessary for the species to inhabit the land.

See Arizona Cattle Growers Ass'n v. Salazar, 606 F.3d

1160, 1163 (9th Cir. 2009); Home Builders Ass’n of N.

Cal. v. U.S. Fish & Wildlife Serv.,616 F.3d 983, (9th Cir.

2010); see also 16 U.S.C. § 1532(5) Ai). Therefore, the

panel majority erred in deferring to the agency’s ex-

pansive interpretation that it “has the authority to

designate as critical habitat any land unoccupied by

and incapable of being occupied by a species simply be-

cause it contains one of those features [necessary for

the species’ survival].” Markle Interests, 848 F.3d at

652 (Jones, J., dissenting from denial of reh’g en banc).

The panel majority’s interpretation of the Com-

merce Clause also presents significant federalism con-

cerns. If the ESA grants the FWS the authority to

11

designate as critical habitat non-habitat with no pre-

sent relationship to the endangered or threatened spe-

cies other than containing, at most, one feature

essential for survival, then “the [FWS’s| critical habi-

tat designation power is virtually limitless.” Markle In-

terests, 848 F.3d at 651 (Jones, J., dissenting) (listing

physical and biological features the FWS regularly

deems essential to species’ conservation as including

such amorphous categories as “upland areas” and

“aquatic breeding habitat”). As this Court explained in

SWANCC, under the “federal-state framework” of fed-

eralism, states have “traditional and primary power

over land and water use.” 531 U.S. at 173-74; see also

Rapanos v. United States, 547 U.S. 715, 738 (2006) (plu-

rality) (“Regulation of land use .. . is a quintessential

state and local power.”). Similarly, in Rapanos, this

Court rejected an exercise of federal agency power that

would “authorize the [Army] Corps [of Engineers] to

function as a de facto regulator of immense stretches

of intrastate land — an authority the agency has shown

its willingness to exercise with the scope of discretion

that would befit a local zoning board.” Jd. at 738 (plu-

rality). Here, the FWS’s attempt to regulate private

* Similarly here, the FWS has already expanded upon the

panel majority decision by enacting a regulation asserting the au-

thority to designate as unoccupied critical habitat land which

does not contain any of the physical or biological features neces-

sary for a species’ survival. See 81 Fed. Reg. 7,414, 7,427 (Feb. 11,

2016). This unprecedented power grab confirms Judge Owen’s

concern, so quickly dismissed by the panel majority, that now “the

Secretary can designate unoccupied land as critical habitat even

if the land has no primary constituent physical or biological

12

land merely because it could, with enough taxpayer

money and the owners’ permission, be turned into crit-

ical habitat, is even more far-reaching than the issue

in Rapanos. It is simply incompatible with federalism

principles to hold that, under the ESA, the FWS may

regulate “immense stretches of intrastate land” uncon-

nected to the species that the FWS seeks to protect.°

Id.; see NFIB, 567 U.S. at 536-37 (The Commerce

Clause “must be read carefully to avoid creating a gen-

eral federal authority akin to the police power| |” be-

cause “ ‘federalism secures to citizens the liberties that

derive from the diffusion of sovereign power.’” (quoting

New York v. United States, 505 U.S. 144, 181 (1992))).

element (to use the Service’s vernacular) essential to the conser-

vation of the species.” Markle Interests, 827 F.3d at 489 (Owen, J.,

dissenting).

* The numerous rationales underlying our federalist system

of government demonstrate why the FWS has overstepped its

boundaries here. See Bond, 564 U.S. at 221 (“The federal structure

allows local policies ‘more sensitive to the diverse needs of a het-

erogeneous society, permits ‘innovation and experimentation, en-

ables greater citizen ‘involvement in democratic processes,’ and

makes government ‘more responsive by putting the States in com-

petition for a mobile citizenry.” (quoting Gregory v. Ashcroft, 501

U.S. 452, 458 (1991))). Here, the critical habitat designation, by

the FWS’s own estimate, could result in $34 million in lost devel-

opment value to Petitioners. 77 Fed. Reg. at 35,141. In stark con-

trast to the options available to Petitioners if such regulatory

action were taken by the state or local government, Petitioners

have no recourse to petition their government for relief when an

unelected federal agency is the regulating entity. See Markle In-

terests, 827 F.3d at 473-74 (Panel majority suggesting that “the

decision not to exclude [critical habitat] is unreviewable.”); but see

id. at 491 (Owen, J., dissenting) (agency’s decision is not entitled

to deference, much less unreviewable).

13

If there are indeed “[s]ome matters — those not within

the bounds of the enumerated powers — [that] are

simply beyond the reach of federal hands|,]” this must

be one of them. See Jonathan H. Adler, Judicial Feder-

alism and the Future of Federal Environmental Regu-

lation, 90 lowa L. Rev. 377, 389 (2005).

The panel majority’s deference to the FWS’s inter-

pretation of the ESA as conferring a boundless regula-

tory authority threatens the careful balance vetween

local and federal powers that this Court has sought to

achieve. Therefore, this Court should grant certiorari

to prevent the FWS from interpreting the ESA in such

a way that the Commerce Clause power would become

coextensive with the states’ police power.

II. CERTIORARI SHOULD BE GRANTED BE-

CAUSE THE PANEL MAJORITY’S APPLICA-

TION OF THE “SUBSTANTIAL EFFECTS”

TEST WOULD PROVIDE NO STOPPING

POINT TO FEDERAL AGENCIES’ REGULA-

TORY AUTHORITY OVER PRIVATE LAND.

As this Court recently explained, “[o)ur respect for

Congress's policy judgments ... can never extend so

far as to disavow restraints on federal power that the

Constitution carefully constructed.” NFIB, 567 U.S. at

538. In Lopez, this Court delineated three categories

of activity that Congress may regulate under its

Commerce Clause power: (1) the use of the channels

of interstate commerce; (2) the instrumentalities of

interstate commerce; and (3) those activities that

14

“substantially affect” interstate commerce. 514 U.S. at

558-59. At issue here is the third Lopez category,

whether the FWS’s designation of Unit 1 as critical

habitat for the dusky gopher frog regulates “activities

that substantially affect interstate commerce.” /d.;

Markle Interests, 827 F.3d at 475. This Court considers

whether the regulated activity at issue is an economic

one that, in the aggregate, substantially affects inter-

state commerce. Wickard v. Filburn, 317 U.S. 111, 128

(1942); Lopez, 514 U.S. at 561. The panel majority held

that the FWS’s designation of Unit 1 as critical habitat

fell within Congress’s Commerce Clause power by

looking to whether critical habitat designations, in the

aggregate, have a substantial effect on interstate com-

merce. 827 F.3d at 476 (finding that designation of

Unit 1 should be “aggregated with all other critical-

habitat designations nationwide”). In defining the reg-

ulated activity at issue as the regulation itself, the

panel majority further convoluted the already-con-

fused substantial effects jurisprudence among the cir-

cuits and landed at a conclusion that directly conflicts

with the limits this Court has placed on Congress’s

Commerce Clause authority.

The circuits have consistently used the “substan-

tial effects” test to circumvent any challenge to federal

regulation of intrastate activity. See Taylor v. United

States, 136 S. Ct. 2074, 2086-89 (2016) (Thomas, J.,

dissenting) (recognizing that the “substantial effects

approach is at war” with the principle that the “Con-

stitution requires a distinction between what is truly

national and what is truly local.”); Arthur B. Mark, III,

15

Currents in Commerce Clause Scholarship Since

Lopez: A Survey, 32 Cap. U. L. Rev. 671, 738-39 (2004)

(“Morrison and . . . Lopez| | have not been applied with

any degree of impact by lower federal courts....

[There is] a need for the Supreme Court to provide a

less malleable and more ‘rule-like’ standard for decid-

ing Commerce Clause cases.” (quoting Brannon P. Den-

ning & Glenn H. Reynolds, Rulings and Resistance:

The New Commerce Clause Jurisprudence Encounters

the Lower Courts, 55 Ark. L. Rev. 1253, 1308-10

(2003))). Examples of overreaching federal regulation

that the circuits have upheld under the substantial ef-

fects test are almost too numerous to choose from. See

Garcia v. Vanguard Car Rental USA, Inc., 540 F.3d

1242, 1250-53 (11th Cir. 2008) (determining that Con-

gress had the authority to abolish state tort liability

for car rental companies when a rental car is involved

in an accident because commercial leasing of cars has

a substantial effect on interstate commerce); United

States v. Ho, 311 F.3d 589, 602-04 (5th Cir. 2002) (ag-

gregating a single instance of improper asbestos re-

moval vio find a substantial effect on interstate

commerce due to air pollution under the Clean Air

Act); L.S. Starrett Co. v. FE.R.C., 650 F.3d 19, 28-29

(1st Cir. 2011) (agency had power under the Commerce

Clause to regulate a hydroelectric generator repair on

private land because, without the repair, the electricity

would come from an interstate grid); but see United

States v. McGuire, 178 F.3d 203, 210-11 (3d Cir. 1999)

(“Taking the ‘effects test’ to its logical extreme would

for all practical purposes grant the federal government

a general police power, the very danger the Lopez

16

Court warned us against.” (internal quotation omit-

ted)). As Justice Thomas has repeatedly warned, the

“rootless and malleable” substantial effects test results

in “Congress appropriating state police powers under

the guise of regulating commerce.” Morrison, 529 U.S.

at 627 (Thomas, J., concurring); Lopez, 514 U.S. at 584-

85 (Thomas, J., concurring) (“Unfortunately, we have

never come to grips with thle] implication|s] of our sub-

stantial effects formula. ... [I] want to point out the

necessity of refashioning a coherent test that does not

tend to ‘obliterate the distinction between what is na-

tional and what is local and create a completely cen-

tralized government.” (quoting NLRB v. Jones &

Laughlin Steel Corp., 301 U.S. 1, 37 (1937))).

Nowhere is the confusion regarding the substan-

tial effects test more apparent than in the ESA context.

In upholding agency regulation of private land and in-

trastate species under the ESA, the circuits have relied

on varied and conflicting rationales. In Nat7 Ass’n of

Home Builders v. Babbitt, 130 F.3d 1041 (D.C. Cir.

1997), the fractured panel majority held that the take

of the Delhi Sands flower-loving fly substantially af-

fected interstate commerce but disagreed as to why.

One judge on the panel majority relied on the intercon-

nectedness of species and ecosystems and thus aggre-

gated the take of the fly with the take of all species. Id.

at 1058-59 (Henderson, J., concurring). The other judge

hypothesized that the loss of the fly could, in the ag-

gregate, have substantial commercial consequences

based on the loss of unknown genetic material and me-

dicinal potential. /d. at 1052-53. In Gibbs v. Babbitt,

17

214 F.3d 483 (4th Cir. 2000), the panel majority focused

on the economic impact of take of red wolves as a spe-

cies in the aggregate and concluded that, if eradicated,

“there will be no red wolf related tourism, no scientific

research, and no commercial trade in pelts.”* Jd. at 492.

In Rancho Viejo v. Norton, 323 F.3d 1062, 1072-73 (D.C.

Cir. 2003), the court looked to activities and motiva-

tions outside the take prohibition to find a substantial

effect on interstate commerce. Specifically, the court

determined that the regulated activity at issue was

“plaintiff’s construction project,” which it found, was a

commercial activity. Id. at 1072. In GDF Realty Invest-

ments, Ltd. v. Norton, 326 F.3d 622 (5th Cir. 2003), the

panel majority refused to aggregate either the future

potential scientific benefits of the species at issue or

take of the species with other endangered species, but

relied on Raich to salvage the regulation as an essen-

tial part of the ESA’s broad regulatory scheme, which

it determined was economic.® Jd. at 640. In sum, the

circuits have varyingly aggregated take of all species,

take of a single species, loss of potential scientific

knowledge, commercial activity that may result in the

take of a species, and none of the above in order to

* The dissent found “humorous” the suggestion that “the red

wolf pelt trade will once again emerge as a centerpiece of our Na-

tion’s economy|,|” but highlighted that language as exemplary of

the absurd lengths to which courts will go to uphold federal regu-

lation using the “substantial effects” test. Gibbs, 214 F.3d at 508-

09 (Luttig, J., dissenting).

® The Tenth Circuit took the same approach in PETPO, re-

jecting application of the substantial effects test entirely. 852 F.3d

at 1005-07.

18

uphold the regulation of intrastate species. These ex-

ercises in judicial gamesmanship seem a far cry from

this Court’s mandate in SWANCC to identify the “pre-

cise object or activity that, in the aggregate, substan-

tially affects interstate commerce.”’ 531 U.S. at 173.

The fact that the circuits’ ESA decisions have provoked

significant, vigorous dissents merely reinforces that

the “substantial effects” test is not working. See GDF

Realty Investments, Ltd. v. Norton, 362 F.3d 286, 287

(5th Cir. 2004) (Jones, J., dissenting from denial of

reh’g en banc) (describing the panel majority’s decision

as “craft|ing] a constitutionally limitless theory of fed-

eral protection” that “offers but a remote, speculative,

attenuated, indeed more than improbable connection

to interstate commerce.”); Nat? Ass’n of Home Build-

ers, 130 F.3d at 1065 (Sentelle, J., dissenting) (“A crea-

tive and imaginative court can certainly speculate on

the possibility that any object cited in any locality no

matter how intrastate or isolated might some day have

a medical, scientific, or economic value which could

then propel it into interstate commerce. There is no

stopping point.”); Gibbs, 214 F.3d at 508 (Luttig, J.,

* In fact, SWANCC expressly rejected attempts to define the

activity at issue outside the scope of the statute under which the

agency was authorized to regulate. 531 U.S. at 173 (“[The precise

activity at issue] is not clear, for although the [agency] has

claimed jurisdiction over petitioner’s land because it contains wa-

ter areas used as habitat by migratory birds, respondents now .. .

focus upon the fact that the regulated activity is petitioner’s mu-

nicipal landfill, which is ‘plainly of a commercial nature.’ But this

is a far cry, indeed, from the ‘navigable waters’ and ‘waters of the

United States’ to which the statute by its terms extends.” (inter-

nal quotation omitted)).

19

dissenting) (“[I|f the Supreme Court were to render to-

morrow the identical opinion that the majority does to-

day ..., both Lopez and Morrison would be consigned

to aberration.”).

The panel majority’s decision takes the “substan-

tial effects” test a step farther, effectively erasing any

limit on the FWS’s authority to regulate any land in

the United States. First, it determined that the regu-

lated activity to be aggregated is the regulation itself.

This circular conclusion effectively insulates all criti-

cal habitat designations — and species listings — from

Commerce Clause challenges.’ If the “regulated activ-

ity” at issue is always framed as the regulation itself,

whether a critical habitat designation or a species list-

ing (or any other regulation), then a court will always

be able to find that the designation of habitat or the

’ The panel majority's re!.ance on GDF Realty to find that

the ESA is a broad “economic regulatory scheme” under Raich fur-

ther highlights the importance of this Court’s review. See Markle

Interests, 827 F.3d at 476. The ESA is clearly directed at protect-

ing species and their habitat, not at regulating commerce, how-

ever broadly one may define that verm. Lee Pollack, The “New”

Commerce Clause: Does Section 9 of the ESA Pass Constitutional

Muster After Gonzales v. Raich?, 15 N.Y.U. Envtl. L.J. 205, 241-42

(2007) (“[A]ny commercial effects of the [ESA] would be purely

incidental to the core of the statutory scheme, which is to preserve

natural resources, a non-commercial topic clearly outside of Con-

gress’|s] power to regulate under the Commerce Clause.”); Com-

ment, Turning the Endangered Species Act Inside Out?, 113 Yale

L.J. 947, 952-53 (2004) (Arguing that GDF Realty erred in “mak-

ing [the ESA’s] master narrative a story about economics [be-

cause] the ESA is not about monetizing endangered species; it is

about preserving them in their natural state. ...The ESA's regu-

lation of interstate commerce is merely circumstantial|[.}”).

18

uphold the regulation of intrastate species. These ex-

ercises in judicial gamesmanship seem a far cry from

this Court’s mandate in SWANCC to identify the “pre-

cise object or activity that, in the aggregate, substan-

tially affects interstate commerce.”® 531 U.S. at 173.

The fact that the circuits’ ESA decisions have provoked

significant, vigorous dissents merely reinforces that

the “substantial effects” test is not working. See GDF

Realty Investments, Ltd. v. Norton, 362 F.3d 286, 287

(5th Cir. 2004) (Jones, J., dissenting from denial of

reh’g en banc) (describing the panel majority’s decision

as “craftling] a constitutionally limitless theory of fed-

eral protection” that “offers but a remote, speculative,

attenuated, indeed more than improbable connection

to interstate commerce.”); Nat'l Ass’n of Home Build-

ers, 130 F.3d at 1065 (Sentelle, J., dissenting) (“A crea-

tive and imaginative court can certainly speculate on

the possibility that any object cited in any locality no

matter how intrastate or isolated might some day have

a medical, scientific, or economic value which could

then propel it into interstate commerce. There is no

stopping point.”); Gibbs, 214 F.3d at 508 (Luttig, J.,

© In fact, SWANCC expressly rejected attempts to define the

activity at issue outside the scope of the statute under which the

agency was authorized to regulate. 531 U.S. at 173 (“[The precise

activity at issue] is not clear, for although the |agency| has

claimed jurisdiction over petitioner's land because it contains wa-

ter areas used as habitat by migratory birds, respondents now .. .

focus upon the fact that the regulated activity is petitioner's mu-

nicipal landfill, which is ‘plainly of a commercial nature.’ But this

is a far cry, indeed, from the ‘navigable waters’ and ‘waters of the

United States’ to which the statute by its terms extends.” (inter-

nal quotation omitted)).

19

dissenting) (“[I]f the Supreme Court were to render to-

morrow the identical opinion that the majority does to-

day ..., both Lopez and Morrison would be consigned

to aberration.”).

The panel majority’s decision takes the “substan-

tial effects” test a step farther, effectively erasing any

limit on the FWS’s authority to regulate any land in

the United States. First, it determined that the regu-

lated activity to be aggregated is the regulation itself.

This circular conclusion effectively insulates all criti-

cal habitat designations — and species listings — from

Commerce Clause challenges.’ If the “regulated activ-

ity” at issue is always framed as the regulation itself,

whether a critical habitat designation or a species list-

ing (or any other regulation), then a court will always

be able to find that the designation of habitat or the

' The panel majority's reliance on GDF Realty to find that

the ESA is a broad “economic regulatory scheme” under Raich fur-

ther highlights the importance of this Court’s review. See Markle

Interests, 827 F.3d at 476. The ESA is clearly directed at protect-

ing species and their habitat, not at regulating commerce, how-

ever broadly one may define that term. Lee Pollack, The “New”

Commerce Clause: Does Section 9 of the ESA Pass Constitutional

Muster After Gonzales v. Raich?, 15 N.Y.U. Envtl. L.J. 205, 241-42

(2007) (“[A|ny commercial effects of the [ESA] would be purely

incidental to the core of the statutory scheme, which is to preserve

natural resources, a non-commercial topic clearly outside of Con-

gress |s| power to regulate under the Commerce Clause.”); Com-

ment, Turning the Endangered Species Act Inside Out?, 113 Yale

L.J. 947, 952-53 (2004) (Arguing that GDF Realty erred in “mak-

ing [the ESA’s] master narrative a story about economics [be-

cause] the ESA is not about monetizing endangered species; it is

about preserving them in their natural state. ...The ESA’s regu-

lation of interstate commerce is merely circumstantial|.]”).

20

listing of the species substantially affects interstate

commerce in the aggregate. See Markle Interests, 827

F.3d at 475-76. This novel interpretation of the Com-

merce Clause “would open a new and potentially vast

domain to congressional authority.” NFIB, 567 U.S. at

552 (opinion of Roberts, C.J.).

Second, the panel majority’s decision ignores this

Court’s rule in Morrison that the link between the reg-

ulated activity and a substantial effect on interstate

commerce must not be so attenuated as to leave no log-

ical stopping point to the Commerce Clause power. 529

U.S. at 615 (rejecting “a method of reasoning that .. .

[is] unworkable if we are to maintain the Constitu-

tion’s enumeration of powers.”); see Gulf Oil Corp. v.

Copp Paving Co., Inc., 419 U.S. 186, 198 (1974) (Reject-

ing Commerce Clause theory that “has no logical end-

point|)” and where “/t]he universe of arguably

included activities would be broad and its limits nebu-

lous in the extreme.”). Under the panel majority’s de-

cision, “[ilt is easily conceivable that ‘the best scientific

data available’ would lead scientists to conclude that

an empty field that is not currently habitable could be

altered to become habitat for an endangered species.”

Markle Interests, 827 F.3d at 488 (Owen, J., dissenting).

The majority's attempts to “cabin|}|” the implications

of granting the FWS powers more befitting a local zon-

ing board fall short of providing a limiting principle.

Id. at 488-89 (explaining the majority’s contradictory

conclusions that one physical or biological feature is

necessary for designation, but that any land may be

designated so long as it can be modified to contain such

21

feature). Indeed, following the panel majority decision,

the FWS quickly implemented a regulation asserting

that the ESA authorizes it to designate as critical hab-

itat any unoccupied land it deems essential to the sur-

vival of a species, regardless of the presence of physical

or biological features necessary for survival. 81 Fed.

Reg. at 7,427. The FWS has thus unambiguously de-

clared the path it intends to follow under its newfound

authority — a path that “carr{ies] us [far] from the no-

tion of a government of limited powers.” See NFIB, 567

U.S. at 551 (opinion of Roberts, C.J.).

The ESA may be the “pitbull of all environmental

legislation,” but the Commerce Clause does not allow

the FWS to reach private lands unconnected to any en-

dangered or threatened species save for the presence

of, at most, only one of the biological features necessary

to sustain the species. This Court has emphasized that

the government may not “pile inference upon infer-

ence” to make the connection between a regulated ac-

tivity and interstate commerce. Lopez, 514 U.S. at 567.

To maintain a “distinction between national and local

authority[,]” Morrison, 529 U.S. at 615, the Commerce

Clause must not be construed to allow the FWS to reg-

ulate private land that is not habitable and has no pro-

spect of becoming so.

The Constitution must be interpreted to give effect

to all its clauses. See Marbury, 5 U.S. at 174 (“It cannot

be presumed that any clause in the constitution is in-

tended to be without effect; and therefore such a con-

struction is inadmissible, unless the words require

it.”); Lopez, 514 U.S. at 588 (Thomas, J., concurring)

22

(“After all, if Congress may regulate all matters that

substantially affect commerce,” then “many of Con-

gress’ other enumerated powers under Art. I, § 8[] are

wholly superfluous.”). However, under the “substantial

effects” test, “[e]ven such a seemingly parochial action

as borrowing a cup of sugar from a neighbor can be

viewed as part of the stream of commerce that extends

to refineries overseas.” McGuire, 178 F.3d at 210. Jus-

tice Thomas’s concern that the substantial effects test,

“if taken to its logical extreme, would give Congress a

‘police power’ over all aspects of American life[,]” is cer-

tainly borne out by the panel majority’s decision below.

See Lopez, 514 U.S. at 584 (Thomas, J., concurring);

Richard A. Epstein, The Proper Scope of the Commerce

Power, 73 Va. L. Rev. 1387, 1418 (1987) (explaining

that, in announcing the substantial effects test, “the

Court acted as though any exercise of the congres-

sional jurisdiction were benign”).

In sum, under the panel majority’s interpretation,

the “substantial effects” test is merely an exercise in

judicial imagination such that “one always can draw

the circle broadly enough to cover the activity|.|” Lopez,

514 U.S. at 601 (emphasis in original) (Thomas, J., con-

curring). Drawing that circle so large that a federal

agency may regulate any land in the United States un-

der the auspices of the ESA is simply more weight than

the Commerce Clause can bear. Therefore, this Court

should take the opportunity to clarify the “substantial

effects” test in order to place some limits on a federal

agency’s ability to regulate under the Commerce Clause.

¢

23

CONCLUSION

For the foregoing reasons, the Court should grant

certiorari.

Respectfully submitted,

STEVEN J. LECHNER

Counsel of Record

GINA M. CANNAN

MOUNTAIN STATES LEGAL FOUNDATION

2596 South Lewis Way

Lakewood, Colorado 80227

(303) 292-2021

lechner@mountainstateslegal.com

gina@mountainstateslegal.com

Attorneys for Amicus Curiae