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

FILED

—— | AUG 14 2017

Nos. 17-71, 17-74 SUPREME COURT Oe

IN THE

Supreme Court of the Anited States

WEYERHAEUSER CoO.,

Petitioner,

Vv.

U.S. FISH AND WILDLIFE SERVICE, et ai.,

Respondents.

MARKLE INTERESTS, L.L.C., et al.,

Petitioners,

v.

U.S. FISH AND WILDLIFE SERVICE, et al.

Respondents.

On Petitions for Writs of Certiorari to the

U.S. Court of Appeals for the Fifth Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATION

AND ALLIED EDUCATIONAL FOUNDATION

AS AMICI CURIAE IN SUPPORT OF PETITIONERS

Richard A. Samp

(Counsel of Record)

Mark S. Chenoweth

Washington Legal Foundation

2009 Massachusetts Ave., NW

Washington, DC 20036

202-588-0302

Date: August 14, 2017 rsam If.o

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

Linrary of Camgesee

Low Litwary

QUESTIONS PRESENTED

1. Whether the Endanger Species Act prohibits

designation of private land as unoccupied critical

habitat that is neither habitat nor essential to species

conservation.

2. Whether federal law precludes courts from

reviewing an agency decision not to exclude a tract

from critical habitat pursuant to 16 U.S.C. § 1533(b)(2),

where the agency bases its decision on a determination

that the cost of designation (measured in terms of lost

development value for the tract) is not disproportionate

to “biological” benefits of designation.

ii

TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................... V

INTERESTS OF AMICICURIAE .............. 1

STATEMENT OF THE CASE ................. 3

SUMMARY OF ARGUMENT .................. 7

REASONS FOR GRANTING THE PETITION ... 12

I, REVIEW IS WARRANTED TO RESOLVE THE

CONFLICT BETWEEN THE DECISION BELOW

AND THE CouRT’S APA CASE LAW ......... 12

A. The Decision Below Misapplies the

“Committed to Agency Discretion”

Exception to Judicial Review of

Administrative Action ............ 13

P The Decision Below Was Premised

on a Basic Misunderstanding of the

Endangered Species Act .......... 16

C. The Decision Below Directly

Conflicts with this Court’s Holding

he. se cee eceneuseeeness 20

Il. REVIEW IS WARRANTED BECAUSE THE

DECISION BELOW PRECLUDES REVIEW OF

ECONOMICALLY IRRATIONAL DECISION-

ee ees ok te choeeeccetes 21

iv

Page

Ill. THE DECISION BELOW SERIOUSLY ERODES

THE AUTHORITY OF FEDERAL COURTS TO

REVIEW FEDERAL ADMINISTRATIVE

SET is buss 6 ee beac ee ond Bieta meee 23

TABLE OF AUTHORITIES

Page(s)

Cases:

Babbitt v. Sweet Home Chapter of Communities

for a Great Oregon, 515 U.S. 687 (1995) ........ l

Bear Valley Mut. Water Co. v. Jewell,

790 F.3d 977 (9th Cir. 2015) ................ 15

Bennett v. Spear,

520 U.S. 164 (1997) .............. 1, 6, 8, 20, 21

Bowen v. Michigan Academy of Family Physicians,

SP EE gc ccccvsccwsevececves 2, 12

Cuozzo Speed Technologies, LLC v. Lee,

Ns Se ecw eben 13

Dickson v. Secretary of Defense,

68 F.3d 1396 (D.C. Cir. 1995) ............... 16

Heckler v. Cheney,

470 U.S. 821 (1985) ............. 8, 9, 13, 14, 15

Mach Mining, LLC v. EEOC,

a nD... occ beebcteene 7, 12, 13

Michigan v. EPA,

136 GS. Ce. SEBS GADAG) .. ccc ccccccces 10, 22, 23

Murray Energy Corp. v. EPA,

No. 15-3751 (dec. pending, 6th Cir.) ........... 1

Nat'l Assoc. of Home Builders v. Defs. of Wildlife,

Se SR OED oc cc cccccccncesccoess 1, 2

TVA v. Hill,

ED oes cee ese eetses 11, 19

Utility Air Reg. Group v. EPA,

a ee ED non oc tee vccccccvevase l

Page(s)

Statutes and Regulations:

Administrative Procedure Act (APA) ..... 4, 11, 12,

19, 20

5 U.S.C. § 70l(a)..... EE eye ye 11

5 U.S.C. § 701(a)(2)..... 5, 8, 9, 13, 14, 15, 20

Pent ccksweueeees seuces 11, 12

i ee as Oe eee 4

a i a eat 1, 25

I eerie Oe ee ee ae 1

Endangered Species Act (ESA),

Be CE ENO, nc wcc ccc ccccsecs passim

16 U.S.C. § 1532(5)(A)@ii) . .. ee ee 3

16 U.S.C. § 1533(aXSMA) ...........0---- 3

16 U.S.C. § 1533(b)(2)...............- passim

Endangered Species Act Amendments of 1978,

Pub. L. No. 95-632, 92 Stat. 3751 (1978)....... 19

Oy Oe REED no's bos cercevesddsosee 24

SP: LD dG 40 cen seuws sae eees ves 12, 17

Page(s)

Miscellaneous:

IEC, Economic Analysis of Critical Habitat

Designation for the Dusky Gopher Frog

Pa <<¢bob 6 dedouees wéb-bi bee 600 6K 22

Damien Schiff, Judicial Review Endangered:

Decisions Not to Exclude Areas from Critical

Habitat Should Be Reviewable Under the APA,

47 Envtl. L. Rep. 10352 (2017) .............. 19

Solicitor, Dep't of Interior, The Secretary's

Authority to Exclude Areas from a Critical

Habitat Designation under Section 4(b)(2)

ST ED v0.6 6 00 oo 666 ce de cecees 24

77 Fed. Reg. 35,118 (June 12, 2012)............. 4

7 ce rr, psecee nes oe dues eueoed 22

INTERESTS OF AMICI CURIAE

Washington Legal Foundation (WLF) is a

nonprofit public-interest law firm and policy center

with supporters in all 50 states.' WLF devotes a

substantial portion of its resources to defending free

enterprise, individual rights, a limited and accountable

government, and the rule of law.

To that end, WLF has appeared before this

Court as well as other federal courts to urge adoption

of environmental policies that strike an appropriate

balance between environmental safety and economic

well-being. See, e.g. Murray Energy Corp. v. EPA, No.

15-3751 (dec. pending, 6th Cir.) (defining “Waters of

the United States” under Clean Water Act); Utility Air

Reg. Group v. EPA, 1348. Ct. 2427 (2014) (challenge to

EPA’s Clean Air Act “tailoring rule”). In particular,

WLF has participated in virtually every major case

that has come before this Court regarding the scope of

the Endangered Species Act (ESA), 16 U.S.C. § 1531 et

seq. See, e.g., Nat'l Assoc. of Home Builders v.

Defenders of Wildlife, 551 U.S. 644 (2007); Bennett v.

Spear, 520 U.S. 154 (1997); Babbitt v. Sweet Home

Chapter of Communities for a Great Oregon, 515 U.S.

687 (1995).

The Allied Educational Foundation (AEF) is a

nonprofit charitable and educational foundation based

' Pursuant to Supreme Court Rule 37.6, amici curiae state

that no counsel for a party authored this brief in whole or in part;

and that no person or entity, other than amici and their counsel,

made a monetary contribution intended to fund the preparation or

submission of this brief. More than 10 days prior to the due date,

counsel for amici provided counsel for Respondents with notice of

their intent to file. All parties have consented to the filing.

2

in Tenafly, New Jersey. Founded in 1964, AEF is

dedicated to promoting education in diverse areas of

study, such as law and public policy, and has appeared

as amicus curiae in this Court on a number of

occasions, including in Nat'l Assoc. of Home Builders.

Amici agree with Petitioners that review is

warranted on each of the Questions Presented in Nos.

17-71 and 17-74. Amici write separately to focus on the

second question raised by Petitioner Weyerhaeuser:

whether Congress intended to preclude all judicial

review of decisions of the U.S. Fish and Wildlife Service

(FWS) not to exclude areas from an ESA “critical

habitat” designation.

As Judge Edith Jones concluded in her dissent

from denial of rehearing en banc (joined by five other

Fifth Circuit judges), the panel’s holding that FWS no-

exclusion decisions are not subject to judicial review

“play[s] havoc with administrative law.” Pet. App.

156a.” Amici are concerned that if that holding is

allowed to stand, it will provide federal agencies with

unilateral power to make a broad array of regulatory

decisions, unchecked by any possibility of judicial

review. Amici do not believe that the decision below is

consistent with this Court’s repeated and longstanding

application of a “strong presumption” favoring judicial

review of administrative action. Bowen v. Michigan

Academy of Family Physicians, 476 U.S. 667, 670

(1986).

* When citing decisions below, amici reference the Petition

Appendix in No. 17-71.

3

STATEMENT OF THE CASE

Once a plant or animal species has been listed as

“endangered,” the Endangered Species Act generally

requires FWS (or, in appropriate cases, the National

Oceanic and Atmospheric Administration) to designate

“critical habitat” for the species. 16 U.S.C.

§ 1533(a)(3)(A). With respect to areas not “occupied” by

the species at the time of its listing, such areas may

not be designated as critical habitat except “upon a

determination by the Secretary that such areas are

essential for the conservation of the _ species.”

§ 1532(5)(A)(ii) (emphasis added).

The ESA states that such designations “shall” be

made “on the basis of the best scientific data available

and after taking into consideration the economic

impact, the impact on national security, and any other

relevant impact, of specifying any particular area as

critical habitat.” § 1533(b)(2). In determining the scope

of the designated area:

The Secretary may exclude any area from

critical habitat if he determines that the

benefits of such exclusion outweigh the

benefits of specifying such areas as part of

the critical habitat, unless he determines,

based on the best scientific and

commercial data available, that the

failure to designate such areas as critical

habitat will result in the extinction of the

species concerned.

Tbid.

4

In 2001, FWS listed the Mississippi gopher frog

(a species of frog currently found only in Mississippi) as

an endangered species.* In 2011, FWS published a

proposed rule that would have designated certain areas

in Mississippi (but not elsewhere) as critical habitat for

the species. Pet. App. 86a. In response to peer-review

comments that the designated areas were insufficient

for conservation of the species, FWS amended the

proposed rule to include an area in Louisiana (referred

to as “Unit 1”) within the designation. Id. at 87a.

In its 2012 final rule, FWS continued to include

Unit 1 (consisting of 1,544 acres of forested land not

currently occupied by the dusky gopher frog) in the

area designated as critical habitat. 77 Fed. Reg. 35,118

(June 12, 2012). Petitioners (collectively,

“Weyerhaeuser’) own the land included in Unit 1.

They filed suit in district court in 2013, challenging the

“critical habitat” designation. Among their claims:

FWS’s designation was arbitrary, capricious, and an

abuse of discretion—in violation of the Administrative

Procedure Act (APA), 5 U.S.C. § 706(2)(A)—because

FWS failed to exclude Unit 1 from the designation,

even though the costs of inclusion vastly exceeded the

benefits (if any) of inclusion.

The district court granted FWS’s motion for

summary judgment and dismissed the complaint. Pet.

App. 78a-122a. The court conceded that Petitioners’

challenge to FWS’s economic analysis was their “most

* FWS renamed the species the “dusky gopher frog” in

2012, at about the same time that it began contemplating

designating areas outside of Mississippi as “critical habitat” for the

species.

5

compelling issue,” and it labeled “most troubling”

FWS’s “conclusion that the economic impacts on Unit

1 are not disproportionate.” Jd. at 113a-1l4a._ It

ultimately concluded, however, that the ESA required

it to defer to FWS’s decision to include Unit 1 within

the critical habitat designation. Jd. at 118a.

A divided Fifth Circuit panel affirmed. Pet. App.

la-77a. The panel majority devoted most of its opinion

to explaining its conclusion that FWS acted reasonably

in determining that: (1) designating occupied habitat

alone would be inadequate to ensure the conservation

of the dusky gopher frog; and (2) Unit 1 is essential for

the conservation of the frog. /d. at 15a-32a. It then

declined to review Weyerhaeuser’s claim that Unit 1

should have been excluded from the critical-habitat

designation on the basis of the designation’s economic

costs. Id. at 32a-36a. It concluded that FWS decisions

not to exclude areas from such designation are

“decisions ‘committed to agency discretion by law” and

thus “are not reviewable in federal court.” Jd. at 33a

(quoting 5 U.S.C. § 701(a)(2)). To support its

conclusion that Congress intended to preclude judicial

review of FWS decisions not to exclude areas on the

basis of economic considerations, the panel cited the

word “may” in the second sentence of 16 U.S.C.

§ 1533(b)(2). Ibid.*

Judge Owen dissented. Pet. App. 48a-77a. She

concluded that the ESA precluded inclusion of Unit 1

* The cited sentence states, in part, that FWS “may

exclude any area from critical habitat if [it] determines that the

benefits of such exclusion outweigh the benefits of specifying such

area as part of the critical habitat.” § 1533(b)(2) (emphasis added).

6

in the critical-habitat designation because: (1) the

area’s “biological and physical characteristics will not

support a dusky gopher frog population”; and (2) there

is no evidence that it will become “essential” to the

conservation of the species because “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.” Id. at 48a. In light of her conclusion,

Judge Owen did not address the majority’s holding that

FWS’s no-exclusion determination was not subject to

judicial review.

In February 2017, the Fifth Circuit voted 8-6 to

deny Weyerhaeuser’s petition for rehearing en banc.

Pet. App. 124a. Judge Jones issued an opinion (joined

by five other judges) dissenting from the denial. Jd. at

124a-162a.

Among the reasons cited by Judge Jones for

granting rehearing was her conclusion that “[t]he panel

majority play havoc with administrative law by

declaring the Service’s decision not to exclude Unit 1

non-judicially reviewable.” Jd. at 156a. She faulted the

panel for “never recognizing or applying” the “strong

presumption favoring judicial review of administrative

action,” a presumption that “is not easily overcome.”

Id. at 160a. She argued that the panel decision directly

conflicts with this Court’s decision in Bennett v. Spear,

that FWS must take economic considerations into

account in making critical habitat decisions, and that

“its ultimate decision regarding designation of critical

habitat is reviewable for abuse of discretion.” Id. at

161a (citing Bennett, 520 U.S. at 172). She concluded,

“The panel majority's refusal to conduct judicial review

7

is insupportable and an abdication of our responsibility

to oversee, according to the APA, agency action.” Id. at

162a.

SUMMARY OF ARGUMENT

The Petitions raise issues of exceptional

importance. In particular, the Fifth Circuit's

determination that Congress intended to preclude all

review of FWS no-exclusion decisions conflicts sharply

with this Court’s case law, which creates a strong

presumption of judicial review of administrative action.

The Fifth Circuit held that Congress barred

courts from reviewing an FWS determination to

proceed with a “critical habitat” designation in the face

of landowner objections that designation would impose

unwarranted economic costs. Pet. App. 32a-36a. Any

such congressional edict would represent an

extraordinary departure from the manner in which

Congress is normally presumed to legislate. That is so

because “[a]bsent [judicial] review, [an agency’s]

compliance with the law would rest in the [agency’s]

hands alone.” Mach Mining, LLC v. EEOC, 1355S Ct.

1645, 1652 (2015). The Court explained:

We need only know—and know that

Congress knows—that legal lapses and

violations occur, and especially so when

they have no consequence. That is why

this Court has so long applied a strong

presumption favoring judicial review of

administrative action.

Id. at 1652-53.

8

The Fifth Circuit based its determination to bar

judicial review of FWS cost-benefit determinations on

Congress use of the word “may” rather than “shall” in

the second sentence of § 1533(b)(2). That single word

cannot possibly bear the weight imposed on it by FWS

and the Fifth Circuit—particularly because the

previous sentence in § 1533(b)(2) states that FWS,

when making critical-habitat determinations, “shall”

take into consideration “the economic impact ... of

specifying any particular area as critical habitat.”

There could have been only one purpose in requiring

consideration of economic impact: to prevent an area

from being designated as critical habitat when the

costs of doing so outweigh the benefits.

FWS may be entitled to considerable leeway in

how it goes about weighing costs and benefits. But

nothing in the ESA suggests that courts are precluded

from reviewing FWS’s ultimate determination under an

abuse-of-discretion standard. Indeed, the Court in

Bennett explicitly held that ESA critical-habitat

designations were subject to judicial review based on

claims that FWS failed to properly consider the

“economic impact” of the designations. Bennett, 520

U.S. at 172. Review is warranted to resolve the conflict

between Bennett and the Fifth Circuit’s contrary

holding.

In concluding that FWS no-exclusion

determinations are “committed to agency discretion by

law,” 5 U.S.C. § 701(a)(2), the Fifth Circuit relied on

this Court’s decision in Heckler v. Cheney, 470 U.S. 821

(1985). Pet. App. 33a. That reliance was misplaced.

Heckler held that, in general, the decision by a federal

enforcement agency not to bring an enforcement action

9

is not subject to judicial review, primarily because “an

agency decision not to enforce often involves a

complicated balancing of a number of factors which are

peculiarly within its expertise.” 470 U.S. at 831. The

Fifth Circuit sought to analogize FWS’s decision not to

exclude a particular area from critical habitat to an

agency's decision not to bring an enforcement action.

That analogy makes little sense. Any FWS decision not

to exclude a particular area from critical habitat is, by

definition, a decision to include the area in the

designation—thereby subjecting the area _ to

burdensome government regulation.

Nor can FWS realistically argue that a reviewing

court would have no meaningful standard against

which to judge FWS’s exercise of discretion. Indeed,

the Service readily concedes that point when the shoe

is on the other foot. When an environmental group

objects to an FWS decision to exclude particular areas

from a critical-habitat designation on the basis of the

second sentence of § 1533(b)(2), the agency decision is

subject to review under an _ abuse-of-discretion

standard. If a reviewing court has meaningful

standards against which to judge an FWS decision to

exclude a particular area based on a cost-benefit

analysis, then it likewise has meaningful standards

against which to judge an FWS no-exclusion decision.

The Fifth Circuit’s decision to bar judicial review

is particularly troubling because the evidence

overwhelmingly supports Petitioners’ contention that

FWS was unable to identify any benefits of Unit 1

critical-habitat designation that would offset the

admittedly severe economic burdens imposed on

10

landowners by that designation.° FWS’s April 6, 2012

“Economic Analysis” did not identify any benefits, other

than that land-use restrictions imposed as a result of

the designation might preserve open space and thereby

“increase adjacent or nearby property values.” That

“benefit” does not, of course, do anything to assist the

dusky gopher frog or any other endangered species for

whose benefit Congress adopted the ESA.

Given § 1533(b)(2)’s mandate that FWS consider

economic impact when designating critical habitat, at

some point the imbalance between costs and benefits

becomes so great that the only rational decision is to

exclude the area in question. As the Court recently

explained, “One would not say that it is even rational,

never mind ‘appropriate,’ to impose billions of dollars

in economic costs in return for a few dollars in health

or environmental benefits.” Michigan v. EPA, 135 S.

Ct. 2699, 2707 (2015). Yet, under the Fifth Circuit's

ruling, courts are not permitted to review FWS’s cost-

benefit determination, no matter how irrational.

The circumstances surrounding adoption of

§ 1533(b)(2) also strongly support Weyerhaeuser’s view

that Congress intended to permit judicial review of

FWS cost-benefit determinations. Congress added

§ 1533(b)(2), including its “economic impact” and

° It is difficult to imagine how the designation could be of

any benefit to the dusky gopher frog, given that the frog cannot be

introduced into Unit 1 without the permission of landowners

(permission they have said they will not grant) and given that (as

FWS concedes) Unit | is not currently habitable for the dusky

gopher frog and could not become habitable unless landowners

agreed to substantial alterations of the property.

11

power-to-exclude language, in 1978, in response to the

Court’s decision in TVA v. Hill, 437 U.S. 153 (1978).

TVA upheld an ESA injunction against completion of

the almost-finished Tellico Dam because (some feared)

it might eradicate an endangered fish, the snail

darter—even though abandonment of the dam would

have huge economic consequences. The principal

purpose of the 1978 amendments was to ensure that

the ESA would not be applied in an economically

irrational manner. There is little reason to believe that

a Congress intent on injecting economic rationality into

ESA decision-making simultaneously barred courts

from hearing claims that FWS acted irrationally in

making a critical-habitat designation.

Finally, review is also warranted because the

decision below represents a serious erosion of the

authority of federal courts to review federal

administrative action. The APA authorizes judicial

review of any “final agency action for which there is no

other adequate remedy in a court,” 5 U.S.C. § 704,

except to the extent that “statutes preclude judicial

review or “agency action is committed to agency

discretion by law.” 5 U.S.C. § 701(a). By invoking the

“committed to agency discretion by law” exception as

the basis for precluding review of all FWS no-exclusion

decisions—based on nothing more than inclusion of the

word “may” in a statute—the Fifth Circuit has upended

the traditional strong presumption favoring judicial

review. Unless the appeals court decision is

overturned, the federal government can be expected to

continue to press its constricted views regarding the

scope of judicial review of agency action. Indeed, FWS

(and other agencies that administer the ESA) have

memorialized their misinterpretation of § 1533(b)(2) in

12

formal regulations and guidance documents. See, e.g.,

50 C.F.R. § 424.19.

REASONS FOR GRANTING THE PETITION

a REVIEW IS WARRANTED TO RESOLVE THE

CONFLICT BETWEEN THE DECISION BELOW AND

THE COuURT’S APA CASE LAW

Subject to very limited exceptions, the APA

authorizes judicial review of “final agency action for

which there is no other adequate remedy in a court.”

5 U.S.C. § 704. The Court has long recognized a

“strong presumption” that the actions of federal

agencies are subject to judicial review. Bowen, 476

U.S. at 670. As the Court recently explained:

Congress rarely intends to prevent courts

from enforcing its directives to federal

agencies. For that reason, this Court

applies a “strong presumption” favoring

judicial review of administrative action.

Mach Mining, 135 S. Ct. at 1651 (citations omitted).

The Fifth Circuit's determination that Congress

intended to preclude review of FWS’s decision not to

exclude Unit 1 from the critical-habitat designation

(i.e., its decision to include Unit 1) conflicts sharply

with this Court’s strong-presumption case law. Review

is warranted to resolve that conflict.

13

A. The Decision Below Misapplies the

“Committed to Agency Discretion”

Exception to Judicial Review of

Administrative Action

The Fifth Circuit did not contend that any

federal law explicitly precludes judicial review of an

agency's decision to designate ESA critical habitat.

Rather, the appeals court based its no-judicial-review

determination on 5 U.S.C. § 701(a)(2), which bars

review when “agency action is committed to agency

discretion by law.” Pet. App. 33a. It concluded that

Congress precluded review in this instance because

there are “no meaningful standards against which to

judge the agency’s exercise of discretion.” [bid (quoting

Heckler, 470 U.S. at 830).

The appeals court premised its invocation of

§ 701(a)(2) on a misunderstanding of that statute that

squarely conflicts with this Court’s case law. Amici

note initially that the panel neither recognized nor

applied the strong presumption favoring judicial

review. Proper application of the presumption requires

a court to interpret arguably ambiguous statutes as not

providing agencies with unreviewable discretion.

Cuozzo Speed Technologies, LLC v. Lee, 136 S. Ct.

2131, 2140 (2016) (“We recognize the ‘strong

presumption’ in favor of judicial review that we apply

when we interpret statutes, including statutes that

may limit or preclude review.”) An agency claiming

that its actions are unreviewable “bears a heavy

burden in attempting to show that Congress prohibited

all judicial review.” Mach Mining, 135 S. Ct. at 1651.

Yet, the decision below includes no indication that the

panel imposed any evidentiary burden on FWS or even

14

considered interpreting statutory ambiguities in favor

of permitting judicial review.

More importantly, the Fifth Circuit's reliance on

Heckler was wholly misplaced. Properly understood,

Heckler directly conflicts with the decision below.

Heckler was premised on the understanding that

Congress rarely provides guidelines for reviewing the

propriety of an agency’s decision not to initiate an

enforcement action. For that reason, Heckler stated,

“the presumption is that judicial review is not

available” for a decision not to initiate enforcement

action. 470 U.S. at 831 (emphasis added). The Court

explained:

This Court has recognized on several

occasions Over many years that an

agencys decision not to prosecute or

enforce, whether through civil or criminal

process, is a decision generally committed

to an agency's absolute disc. etion. ... The

reasons for this general unsuitability [for

judicial review of agency decisions to

refuse enforcement] are many. First, an

agency decision not to enforce often

involves a complicated balancing of a

number of factors which are peculiarly

within its expertise.

Ibid.®

® Heckler held that § 701(a)(2) precluded judicial review of

prison inmates’ suit to compel the Food and Drug Administration

to take enforcement action against several States’ use of lethal-

injection drugs that had not been approved by FDA as “safe and

15

The Fifth Circuit sought to analogize FWS’s

decision not to exclude a particular area from critical

habitat to Heckler’s analysis of an agency's decision not

to bring an enforcement action. Pet. App. 33a. That

analogy makes little sense. Any FWS decision not to

exclude a particular area from critical habitat is, by

definition, a decision to include the area in the

designation—thereby subjecting the area to

burdensome government regulation. Section 1533(b)(2)

sets forth a list a factors (including “economic impact”)

that FWS must take into account when designating

critical habitat. Accordingly, the Fifth Circuit's

conclusion that § 1533(b)(2) provides “no meaningful

standard against which to judge [FWS’s] exercise of

discretion” in designating critical habitat, ibid, is

implausible and conflicts sharply with Heckler and

other decisions of this Court regarding the meaning of

§ 701(a)(2).

Moreover, the Fifth Circuit’s position on this

issue is inconsistent. The Court agreed with a Ninth

Circuit decision that the FWS’s invocation of

§ 1533(b)(2)’s second sentence to exclude a particular

area from critical-habitat designation based on a cost-

benefit analysis would be subject to judicial review.

Pet. App. 35a (citing with approval Bear Valley Mut.

Water Co. v. Jewell, 790 F.3d 977, 989 (9th Cir. 2015)).

Ifthe ESA provides sufficient “meaningful standard[s]

against which to judge [FWS’s] exercise of discretion”

in excluding an area from a critical-habitat designation

for cost-benefit reasons, then logically there also must

be sufficient standards by which a court could judge

effective” for human use. Id. at 837-38.

16

FWS’s decision to include the same area.

That § 1533(b)(2) states that FWS “may” exclude

an area from a critical-habitat designation for cost-

benefit reasons does not suggest that FWS possesses

absolute discretion not to exclude the area, even when

inclusion would be economically irrational. Neither

FWS nor the Fifth Circuit has cited any other statute

that has been interpreted, based solely on inclusion of

the word “may,” as precluding judicial review of an

agency decision not to desist from undertaking

administrative action. Indeed, the Fifth Circuit's

interpretation of the word “may” directly conflicts with

decisions from the D.C. Circuit, which has held that a

statute is not made unreviewable by the use of

permissive language alone. See, e.g., Dickson v.

Secretary of Defense, 68 F.3d 1396, 1401-02 & n.7 (D.C.

Cir. 1995) (use of “may” suggests that “Congress

intends to confer some discretion on the agency,” not

that “the matter is committed exclusively to agency

discretion”; statute stating that Army “may” excuse an

untimely filing does not confer unreviewable discretion

not to do so).

B. The Decision Below Was Premised on

a Basic Misunderstanding of the

Endangered Species Act

The Fifth Circuit's no-judicial-review

determination was colored by its (and FWS’s) basic

misunderstanding of the ESA and of § 1533(b)(2) in

particular. Properly understood, the ESA requires

FWS to take cost-benefit considerations into account

with respect to every critical-habitat designation.

While the statute affords FWS considerable discretion

17

in determining how much weight to afford cost-benefit

considerations in its designation decision, nothing in

the ESA suggests that courts are precluded from

reviewing FWS’s ultimate determination under an

abuse-of-discretion standard. FWS and the Fifth

Circuit interpret the statute differently; as they read it:

(1) the initial decision to designate critical habitat

should be based solely on the survival needs of the

endangered species; (2) FWS must then analyze all the

factors (including “economic impact”) listed in the first

sentence of § 1533(b)(2); and (3) FWS may, in its

unreviewable discretion, decide to exclude areas if it

concludes that the benefits of exclusion outweigh the

benefits of inclusion, as set forth in the second sentence

of § 1533(b)(2). See, e.g., Pet. App. 15a-32a, 32a-36a;

50 C.F.R. § 424.19 (FWS regulation stating that

Secretary shall “consider the probable economic and

other impacts of the designation” only after initially

proposing that an area be designated). That

interpretation is wholly implausible. Because that

erroneous interpretation is being applied to many

millions of acres of land throughout the United States,

review of the decision below is particularly warranted.

Congress mandated that determinations

regarding the designation of land as critical habitat are

to be made solely on the basis of factors set forth in

§ 1533(b)(2). Determinations “shall” be made:

[O]n the basis of the best scientific

evidence available and after taking into

consideration the economic impact, the

impact on national security, and any

other relevant impact, of specifying any

particular area as critical habitat.

18

Nothing in § 1533(b)(2) suggests, as FWS urges and the

Fifth Circuit held, that the initial designation may be

based solely on the needs of the endangered

species—such as a determination regarding whether

designation of uninhabited lands is “essential” for the

conservation of the species.

Nor does FWS satisfy its statutory obligations to

designate critical habitat “after taking into

consideration ... economic impact” (among other

factors) by undertaking a study of economic impact.

There is only one plausible explanation for why

Congress would require consideration of the economic

impact of designating particular areas as critical

habitat: it was directing FWS to exclude areas

whenever the study of economic impact led FWS to

conclude that exclusion was warranted because the

costs of designation exceeded its benefits.

Indeed, that is precisely what the second

sentence of § 1533(b)(2) says. The second sentence

imposes only one limitation on FWS’s authority to

exclude an area on the basis of cost-benefit

considerations: it may not exclude the area if “failure to

designate such area as a critical habitat will result in

extinction of the species concerned.” FWS and the

Fifth Circuit improperly read the two sentences of

§ 1533(b)(2) as though they address wholly separate

topics: (1) requiring the agency to conduct a study of

economic impact; and (2) granting FWS the option, on

the basis of the study and at its unreviewable

discretion, to exclude areas. But properly read, the

second sentence simply provides further guidance to

FWS regarding how to carry out the designation

obligations imposed on it by the first sentence.

19

Accordingly, nothing in the language of

§ 1533(b)(2) rebuts the “strong presumption” that

Congress intended to permit judicial review of critical-

habitat designations, including review of FWS

determinations that cost-benefit considerations do not

warrant exclusion of particular areas from that

designation.

The circumstances surrounding adoption of

§ 1533(b)(2) also strongly support Weyerhaeuser’s view

that Congress intended to permit judicial review of

FWS cost-benefit determinations. Congress added

§ 1533(b)(2), including its “economic impact” and

power-to-exclude language, in 1978, in response to the

Court’s decision in TVA v. Hill. ESA Amendments of

1978, Pub. L. No. 95-632, 92 Stat. 3751 (1978). TVA

upheld an ESA injunction against completion of the

almost-finished Tellico Dam because (some feared) it

might eradicate an endengered fish, the snail

darter—even though abandonment of the dam would

have huge economic consequences. The principal

purpose of the 1978 amendments was to ensure that

the ESA was not applied in an economically irrational

manner. See Damien Schiff, Judicial Review

Endangered: Decisions Not to Exclude Areas from

Critical Habitat Should Be Reviewable under the APA,

47 Envtl. L. Rep. 10352, 10354-55 (2017). There is

little reason to believe that a Congress intent on

injecting economic rationality into ESA decision-

making simultaneously barred courts from hearing

claims that FWS acted irrationally in making a critical-

habitat designation.

20

C. The Decision Below Directly

Conflicts with this Court’s Holding in

Bennett

In concluding that 5 U.S.C. § 701(a)(2) bars

judicial review of FWS’s no-exclusion decision, the Fifth

Circuit made no mention of this Court’s decision in

Bennett v. Spears. Pet. App. 32a-36a. Yet, Bennett

addressed this precise issue and concluded that FWS

economic-impact decisions were judicially reviewable

under the APA. Review by this Court is warranted to

resolve the conflict between Bennett and the decision

below.

At issue in Bennett was an FWS Biological

Opinion that concluded: (1) long-term operation of the

Klamath Irrigation Project was likely to jeopardize two

endangered species of fish; and (2) a reasonable and

prudent measure to avoid that jeopardy was to require

the maintenance of minimum water levels on certain

reservoirs (thereby reducing the amount of water

available for irrigation). The plaintiffs sought judicial

review of the Biological Opinion, asserting that: (1) it

implicitly designated critical habitat for the

endangered fish; and (2) that designation violated

§ 1533(b)(2) because it was undertaken without

“tak[ing] into consideration the economic impact, and

any other relevant impact, of specifying any particular

area as critical habitat.” Bennett, 520 U.S. at 172.

The government sought dismissal of the claim by

asserting that, under § 1533(b)(2), FWS possessed

unreviewable discretion in deciding whether to exclude

particular areas from a critical-habitat designation

based on economic-impact considerations. The Court

21

rejected that assertion, stating, “the terms of

§ 1533(b)(2) are plainly those of obligation rather than

discretion.” Ibid. The Court stated that use of the

word “may” in the second sentence of § 1533(b)(2) did

not alter its conclusion that courts were authorized to

review—under an abuse of discretion standard—FWS’s

ultimate decision regarding whether to exclude

particular areas from a critical-habitat designation

based on cost-benefit considerations. Ibid.

Judge Jones’s dissent from denial of rehearing en

banc highlighted the clear conflict between Bennett and

the panel decision. Pet. App. 160a-16la. Neither the

panel nor the judges voting to deny rehearing

challenged her conclusion that Bennett's holding

authorizes judicial review under the circumstances of

this case. Review is warranted to resolve the conflict.

IT. REVIEW IS WARRANTED BECAUSE THE

DECISION BELOW PRECLUDES REVIEW OF

ECONOMICALLY IRRATIONAL DECISION-MAKING

The Fifth Circuit’s decision to bar judicial review

is particularly troubling because the evidence

overwhelmingly supports Petitioners’ contention that

FWS was unable to identify any benefits of Unit 1

critical-habitat designation that would offset the

admittedly severe economic burdens imposed on

landowners by that designation.’

’ As explained supra at 10 n.5, the designation of Unit 1

as “critical habitat” cannot possibly provide any benefit to the

dusky gopher frog, at least for the foreseeable future..

22

An economic analysis commissioned by EPA

concluded that the designation of Unit 1 could decrease

the value of that property by as much as $34 million.

The same analysis identified no benefits that the

designation would provide to the dusky gopher frog.

IEC, Economic Analysis of Critical Habitat Designation

for the Dusky Gopher Frog (Apr. 6, 2012) at 5-1 to 5-3.

In its final rule, FWS nonetheless concluded,

“Our economic analysis did not identify any

disproportionate costs that are likely to result from the

designation. Consequently, the Secretary is not

exercising his discretion to exclude any areas from this

designation of critical habitat for the dusky gopher frog

based on economic impacts.” 77 Fed. Reg. at 35,141.

FWS did not explain what it meant by the word

“disproportionate” or how it arrived at its no-

disproportionate-costs conclusion. But one can

reasonably question the rationality of that decision,

given that the ratio of costs to benefits in this instance

is infinite.

Given § 1533(b)(2)’s mandate that FWS consider

economic impact when designating critical habitat, at

some point the imbalance between costs and benefits

becomes so great that the only rational decision is to

exclude the area in question. As the Court recently

explained, “One would not say that it is even rational,

never mind ‘appropriate,’ to impose billions of dollars

in economic costs in return for a few dollars in health

or environmental benefits.” Michigan v. EPA, 135 S.

Ct. 2699, 2707 (2015). Yet, under the Fifth Circuit’s

ruling, courts are not permitted to review FWS’s cost-

benefit determination, no matter how irrational, and

even if there is no benefit at all.

23

The Fifth Circuit sought to distinguish

Michigan, noting that the defendant in that case (EPA)

had explicitly declined to consider costs before

imposing new Clean Air Act (CAA) regulations (despite

a statutory requirement to consider whether the

regulation was “appropriate and necessary”), while

FWS did “tak[e] into consideration” economic impact

before designating Unit 1. Pet. App. 36a. But surely,

§ 1533(b)(2)’s “taking into consideration” requirement

mandates more than simply adding up potential costs.

It also mandates an analysis of whether designation is

warranted in light of those costs and the complete

absence of benefits—an analysis that FWS (all evidence

suggests) never undertook. More importantly, nothing

in § 1533(b)(2) indicates that courts are barred from

reviewing Petitioner's claim that FWS failed to take

economic impact into consideration when deciding not

to exclude Unit 1.

lift. THE DECISION BELOW SERIOUS ERODES THE

AUTHORITY OF FEDERAL COURTS TO REVIEW

FEDERAL ADMINISTRATIVE ACTION

Review of the Fifth Circuit's decision is

particularly warranted because it represents a frontal

assault on the presumption of reviewability of agency

action. Numerous federal statutes use permissive

language when describing the authority of agencies to

act or not act. If mere use of the word “may” in a

statute is to be viewed as a signal that an agency's

decision not to desist from enforcement action is not

reviewable, then little will be left of the “strong

presumption” of reviewability.

In particular, the immigration laws are replete

24

with discretionary language regarding the federal

government's authority to desist from removing an

alien who is present in the United States without

authorization. See, e.g., 8 U.S.C. § 1158(b)(1)(A) (“The

Secretary of Homeland Security or the Attorney

General may grant asylum to an alien who has applied

for asylum in accordance with the requirements and

procedures [they] establish[ ]”) (emphasis added). If

the decision below is allowed to stand, the rights of

large numbers of aliens to contest their removal in

federal court could reasonably be called into question.

Nor is there anything unique about FWS's

contention in this case that its no-exclusion decision is

unreviewable. Indeed, FWS has espoused this

interpretation of § 1533(b)(2) for at least nine years.

See Solicitor, Department of Interior, The Secretary’s

Authority to Exclude Areas from a Critical Habitat

Designation under Section 4(b)(2) of the ESA (Oct.

2008).° Unless review is granted, FWS will continue to

urge courts to adopt the same unwarranted

interpretation of § 1533(b)(2) adopted by the Fifth

Circuit.

‘Given the “strong presumption” of reviewability of

administrative action that courts employ when construing federal

statutes, FWS’s restrictive interpretation of § 1533(b)(2) is not

entitled to deference from the courts.

25

CONCLUSION

The Court should grant the Petitions.

Respectfully submitted,

Richard A. Samp

(Counsel! of Record)

Mark S. Chenoweth

Washington Legal Found.

2009 Massachusetts Ave., NW

Washington, DC 20036

202-588-0302

rsamp@wlf.org

August 14, 2017