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

UNITED STATES FISH AND WILDLIFE SERVICE, ET AL.

Respondents.

On Writ of Certiorari To

The United States Court Of Appeals

For the Fifth Circuit

BRIEF OF AMICI CURIAE

THE NATIONAL ASSOCIATION OF HOME

BUILDERS AND AMERICAN FOREST

RESOURCE COUNCIL IN SUPPORT OF

PETITIONER

LAWSON E. FITE THOMAS J. WARD*

SARA GHAFOURI JEFFREY B. AUGELLO

AMERICAN FOREST NATIONAL ASSOCIATION

RESOURCE COUNCIL OF HOME BUILDERS

5100 S.W. Macadam 1201 15th Street, N.W.

Ave., Suite 350 Washington, D.C. 20005

Portland, OR 97239 (202) 266-8230

(503) 222-9505 * Counsel of Record

CORPORATE DISCLOSURE STATEMENT

Pursuant to Supreme Court Rule 29.6, Amicus

National Association of Home Builders (“NAHB”)

states that it is a non-profit 501(c)(6) corporation

incorporated in the state of Nevada, with its

principal place of business in Washington, D.C.

NAHB has no corporate parents, subsidiaries or

affiliates, and no publicly traded stock. No publicly

traded company has a ten percent or greater

ownership interest in NAHB.

Amicus American Forest Resource Council

CAFRC”) is an Oregon non-profit 501(c)(6)

corporation with its principal place of business in

Portland, Oregon. AFRC has no corporate parents,

subsidiaries or affiliates and does not issue stock.

No publicly-held company has a ten percent or

greater ownership of AFRC.

ul

TABLE OF CONTENTS

Page(s)

INTEREST OF AMICI CURIAE.........00.0............. l

SUMMARY OF ARGUMENT ....00 4

EIS Ae A ee 5

I. THE FIFTH CIRCUIT IMPROPERLY

DENIED REVIEW OF THE SERVICE’S

DETERMINATION UNDER ESA

BTEC TION GIRDER) .....cccccccccccsescesccccccsessessccsccsees 5

A. The Service Concluded That

Designating Unit 1 Had Serious

Economic Implications......................... 5

B. The Fifth Circuit Failed to

Provide Judicial Review ...................... 7

il. THE FIFTH CIRCUIT FAILED TO

ADDRESS THE NONDELEGATION

i cctnircershietcnatiasntiiintetariictininiadieatetenetnneee 9

A. The Nondelegation Doctrine Requires

Congress to Provide Standards

to Guide Agency Actions...................... 9

B. The APA § 701(a)(2) Test And The

Intelligible-Principle Rule Are

il

TABLE OF CONTENTS (cont.)

Ill. ESA SECTION 4(b)(2) AND APA

§ 701(a)(2) SHOULD BE HARMONIZED

TO AVOID THE NONDELEGATION

IIIT ccsicningichcaseatecdinadbdanbinttiaetettbenstactes 11

A. The Canon of Constitutional

ESE EEE ERR 12

B. The APA Encourages Judicial

REE ae 12

C. The Fifth Circuit Misread Section

4(b)(2) and § 701(a)(2).......................... 17

D. The Fifth Circuit’s Opinion is

Internally Inconsistent ...................... 19

E. Agency Action that Constrains The

Use of Private Property Must be

Subject to Judicial Review................ 21

F. Judicial Review of Section 4(b)(2)

Is Essential to Provide Accountability

for Designations Much Larger and

More Consequential than Unit 1...... 27

SID cctensntnsnsnecesvistessenecscsesesuiocsinentemesete 31

iv

TABLE OF AUTHORITIES

Page(s)

CASES

Abbott Labs. v. Gardner, 387 U.S. 136 (1967) ...... 15

Bear Valley Mut. Water Co. v. Jewell,

790 F.3d 977 (9th Cir. 2015)... 20

Bldg. Indus. Ass'n of the Bay Area v. U.S. Dep't

of Commerce, 792 F.3d 1027 (9th Cir. 2015)...... 20

Bowen v. Massachusetts, 487 U.S. 879 (1988) ...... 15

Burbank Anti-Noise Grp. v. Goldschmidt,

623 F.2d 115 (9th Cir. 1980).............0.0.............. 17

Califano v. Sanders, 430 U.S. 99 (1977) .......... 13, 15

Carpenters Indus. Council v. Zinke,

854 F.3d 1 (D.C. Cir. 2017) ....0.00.........ccccccccccceeees 31

Carpenters Indus. Council v. Jewell,

139 F. Supp. 3d 7 (D.D.C. 2015)......00..0.00000........ 31

Citizens to Preserve Overton Park Inc. v. Volpe,

Fe Ts Ca Ie Oi crecerscccseseanscensacessccesscesesese 15, 16

Crowell v. Benson, 285 U.S. 22 (1932)................... 12

Edward J. DeBartolo Corp. v. Fla. Gulf

Coast Bldg. & Const. Trades Council,

GE Ba Se i cdencasncenscsscesccsnssccesescosceseccessees 12

Hawkes Co., Inc. v. U.S. Army Corps of Eng’rs,

782 F.3d GO4 (2O1G)..................ccecccecseeseereeerenes 24-25

Heckler v. Chaney,

470 U.S. 821 (1985)....................000..0006 8, 16, 17, 18

Vv

TABLE OF AUTHORITIES (cont.)

Indus. Union Dep't, AFL-CIO v. Am. Petroleum

Inst., 448 U.S. GO7 (1980) ...............ccccceeeeeeeeee 9, 10

J.W. Hampton, Jr., & Co. v. United States,

EE scccnsunccoccenmiusssdnesnbbeunasnesenenenianes 9

Japan Whaling Ass’n v. Am. Cetacean Soc’y,

a iiecdctcncsnscncteccaneinsecensctantcessneses 15

Jennings v. Rodriguez, 138 S. Ct. 830 (2018) ....... 12

Loving v. United States, 517 U.S. 748 (1996) .... 9-10

Mach Mining, LLC v. E.E.O.C.,

I oo sin siedeniecemeandannabegnes 12

Markle Interests, L.L.C. v. U.S. Fish & Wildlife

Serv., 848 F.3d 635 (5th Cir. 2017) .................... 13

Markle Interests, L.L.C. v. U.S. Fish & Wildlife

Serv., 827 F.3d 452 (5th Cir. 2016) .....8, 17, 20, 21

Marshall Field & Co. v. Clark,

a cenennenmeninnesotss 9

Norton v. S. Utah Wilderness All.,

EEE es ae 17

Ohio Forestry Ass'n, Inc. v. Sierra Club,

EE a 31

Sackett v. E.PA.,

SE TT os ceincsnescnnenupiebecamnenend passim

Sackett v. E.P-A.,

622 F.3d 1139 (9th Cir. 2010)......................00 22

Shaughnessy v. Pedreiro, 349 U.S. 48 (1955)........ 15

U.S. Army Corps of Eng’rs v. Hawkes Co.,

136 S.Ct. 1807 (2016)..................ccecceseeeees 23, 25-26

vi

TABLE OF AUTHORITIES (cont.)

Whitman v. Am. Trucking Ass’ns,

lac lnsichidteninctisenessenmeuibensenes 9

Yakus v. United States, 321 U.S. 414 (1944) ........ 10

STATUTORY &

CONSTITUTIONAL PROVISIONS

inn csictennsennsindanrnninnisiad passim

| __thE e Cnee Cne aR 23

I an cia inniseneinsscnnemneinneidabauuaaieeniaciia 17

i I ic ccnicrsiseuninatenmenmensaamnanes 30

Ni crccemnsoeninnteianel passim

nas cercinccditeadiatiininnsedenlibdnsabiabiiniee 6

ii liin icc cedcnctantancemensiiennnsintcignaminnians 30

77 Fed. Reg. 35,118 (June 12, 2012).......6, 19, 20, 26

77 Fed. Reg. 71,876 (Dec. 4, 2012).............. 27, 29-30

57 Fed. Reg. 1796 @an. 15, 1992)........................ 30

OTHER

S. REP. NO. 79-752

(1st Sess. Nov. 19, 1945).......................... 14, 15-16

H.R. 615, 79th CONG § 10 (1946), reprinted in

Administrative Procedure Act: Legislative

History, 92 CONG. REC. 5750 (daily ed. May

eS ae 13-14

92 CONG. REC. 2159 (1946), reprinted in

Administrative Procedure Act: Legislative

History, H.R. REP. NO. 79-1980 (2d Sess.

TI TI nso cicase sescieesicatcledneiahaliinciepidaneimasentedas 14

vil

TABLE OF AUTHORITIES (cont.)

Amee B. Bergin, Does Application of the APA's

"Committed to Agency Discretion” Exception

Violate the Nondelegation Doctrine? 28 B.C.

ENVTL. AFF. L. REV. 363 (2001)...................... 1]

Kenneth Culp Davis, No Law to Apply,

25 SAN DIEGO L. REV. 1 (1988)......................0.00-. 16

Viktoria Lovei, Revealing the True Definition of

APA § 701(a)(2) by Reconciling "No Law to Apply”

with the Nondelegation Doctrine, 73 U. CHI. L.

es Ce alls ctsichninierimannnnersievtsssezemnintesiines 11

IEC, Economic Analysis of Critical Habitat

Designation for the Dusky Gopher Frog

ES re 6

U.S. Forest Service, Social and Economic Status

and Trends, Northwest Forest Plan: The First

20 Years, Report No. Report FS/R6/PNW/2015/

I BI aicinissanseiincsssnencicintanitasbbdssbsaabisieds 28, 29

U.S. Forest Service and U.S. Bureau of Land

Management, Record of Decision for

Amendments to Forest Service and Bureau

of Land Within the Range of

the Northern Spotted Owl, April 13, 1994.......... 28

1

INTEREST OF AMICI CURIAE'

The National Association of Home _ Builders

(“NAHB”) is a Washington, D.C.-based trade

association whose mission is to enhance the climate

for housing and the building industry. Chief among

NAHB’s_ goals is providing and expanding

opportunities for all people to have safe, decent, and

affordable housing. Founded in 1942, NAHB is a

federation of more than 700 state and local

associations. About one-third of NAHB’s

approximately 140,000 members are home builders

or remodelers, and account for 80% of all homes

constructed in the United States.

Many of NAHB’s members, such as Petitioner, are

private landowners with reasonable expectations

regarding the lawful use of their property. Since a

predominant number of the species protected under

the Endangered Species Act (“ESA”) have the major

share of their habitat on private land, critical

habitat decisions significantly impact NAHB’s

members.

The American Forest Resource Council (“AFRC’”) is

a regional trade association whose purpose is to

advocate for sustained-yield timber harvests on

public timberlands throughout the West to enhance

! Blanket consents from all parties are on file with the Clerk.

No counsel for a party authored this brief in whole or in part,

and no counsel or party made a monetary contribution

intended to fund the preparation or submission of this brief.

No person other than amici curiae, its members, or its counsel

made a monetary contribution to its preparation or submission.

2

forest health and resistance to fire, insects, and

disease. AFRC promotes active management to

attain productive public forests, protect the value

and integrity of adjoining private forests, and assure

community stability. It works to improve federal and

state laws, regulations, policies and decisions

regarding access to and management of public forest

lands and protection of all forest lands. AFRC

represents over 50 forest product businesses and

forest landowners throughout California, Idaho,

Montana, Oregon, and Washington. Many of AFRC’s

members have their operations in communities

adjacent to federal and state forestlands, and the

management of these lands ultimately dictates not

only the viability of their businesses, but also the

economic health of the communities themselves.

AFRC’s members, and the communities in which

they work, have been affected by reductions in

timber harvest resulting from critical habitat

designations, on federal, state, and private land, for

species such as the northern spotted owl, marbled

murrelet, and Canada lynx. AFRC members’ timber

contracts have been suspended, slowed or cancelled

as a result of overbroad critical habitat designations

which fail to comply with the ESA’s strict

requirements. Overbroad designations also

threaten AFRC member interests in forest health,

federal timber supply, and private forest land

because those designations impede forest

management projects that promote forest health and

provide timber supply.

3

AFRC and its members have brought legal

challenges to the sufficiency of some of these

designations. AFRC believes many of the overbroad

critical habitat designations would have been

significantly less burdensome if the Government

faced accountability for its balancing of economic

and other impacts.

4

SUMMARY OF ARGUMENT

Amici’s brief focuses on whether the Fifth Circuit

correctly withheld judicial review of the Fish and

Wildlife Service’s decision not to exclude Unit 1

because of the economic impact of the designation.

The Fifth Circuit's determination that 16 U.S.C. §

1533(b)(2) (Section 4(b)(2)) lacks a “meaningful

standard” by which to review the Fish and Wildlife

Service’s decision triggers a question Under Article

I of the Constitution—“Did Congress

unconstitutionally delegate authority to the

Secretary of the Interior?” Amici argue that the

Court may avoid this constitutional question

because it is reasonable to harmonize ESA Section

4(b)(2) and APA § 701(a)(2) in a manner that permits

judicial review.

5

ARGUMENT

I. THE FIFTH CIRCUIT IMPROPERLY

DENIED REVIEW OF THE SERVICE’S

DETERMINATION UNDER ESA SECTION

4(b)(2).

A. The Service Concluded That

Designating Unit 1 Had Serious

Economic Implications.

According to the United States Fish and Wildlife

Service (“Service”):

St. Tammany Parish is a fast-growing area;

according to the Louisiana State Census

the population grew from 191,268 to

233,740, or 22 percent, between 2000 and

2010. Growth in the Parish is projected to

continue, reaching nearly 500,000 by 2030.

The area immediately surrounding the

proposed critical habitat is experiencing

particularly rapid growth. Within the last

few years large warehousing facilities have

been constructed or have begun

construction in Pearl River. A new high

school was recently opened not far from the

proposed critical habitat and major

transportation infrastructure is planned in

anticipation of continued rapid growth in

the area. In addition, infrastructure

improvements have recently taken place on

Highway 1088 between Interstate 12 and

Highway 36, which runs through the

proposed critical habitat. . . . Because

Louisiana Highway 36 runs through the

6

proposed critical habitat unit, the area is

particularly attractive for development.

IEC, Economic Analysis of Critical Habitat

Designation for the Dusky Gopher Frog 4 71, 73 (Apr.

6, 2012) (“Final Econ. Analysis”), JA 81-83.

Moreover, the Service appreciated that the

designation of Unit 1 could negatively impact this

economic development. Under one scenario the

Service determined that Clean Water Act (“CWA”)

Section 404 permits would be necessary before

development could occur in Unit 1 -triggering the

Endangered Species Act (“ESA”) Section 7

consultation process. 16 U.S.C. § 1536. The Service

estimated that this would lead to 60 percent of the

area being set aside for dusky gopher frog habitat.

Endangered and Threatened Wildlife and Plants:

Designation of Critical Habitat for Dusky Gopher

Frog (Previously Mississippi Gopher Frog), 77 Fed.

Reg. 35,118, 35,141 (June 12, 2012). In another

scenario, “the Service . . . recommend|s] complete

avoidance of development [of Unit 1] in order to

avoid adverse modification of critical habitat.” Final

Econ. Analysis 476, JA 85. Under these scenarios,

the lost residential and commercial development

opportunities would be $20.5 million or $34.0 million

respectively. 77 Fed. Reg. at 35,140-141.

On the other side of the equation, the Service

determined that no monetary benefits from the

designation could be quantified, but found benefits

“expressed in biological terms.” Jd. at 35,141. Yet,

when it balanced the $20.5 or $34 million loss to the

7

landowners against the unquantified biological

benefits, the Service “did not identify any

disproportionate costs” of designation. /d.

B. The Fifth Circuit Failed to Provide

Judicial Review.

The Fifth Circuit refused to review whether the

Service abused its discretion by failing to exclude

Unit 1 from the final designation of gopher frog

critical habitat. The decision to preclude review

involves an interpretation of the relationship

between two statutes, 16 U.S.C. § 1533(b)(2) and 5

U.S.C. § 701(a)(2) (ESA Section 4(b)(2) and the

Administrative Procedure Act (“APA”)).

ESA Section 4(b)(2) provides 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). Furthermore, the Service:

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, unless [it] determines, based on

the best scientific and commercial data

available, that the failure to designate such

area as critical habitat will result in the

extinction of the species concerned.

Id.

Section 701 of the APA provides that agency actions

“committed to agency discretion by law” are not

reviewable in federal court. 5 U.S.C. § 701(a)(2).

Relying on Heckler v. Chaney, 470 U.S. 821, 830

(1985), ? the Fifth Circuit held that the words “may

exclude any area from critical habitat if he

determines that the benefits of such exclusion

outweigh the benefits of specifying such area as part

of the critical habitat . . .” results in a decision

unreviewable under APA § 701(a)(2) because these

words fail to provide a “meaningful standard” to

review the Service’s determination. See Markle

Interests, L.L.C. v. U.S. Fish & Wildlife Serv., 827

F.3d 452, 473 (5th Cir. 2016). The court, however,

failed to fully consider the implications of its holding

which includes serious questions as to the

constitutionality of Section 4(b)(2).

2 Im Chaney, the Court explained that agency action is

committed to agency discretion when there is “no meaningful!

standard against which to judge the agency's exercise of

discretion.” Chaney, 470 U.S. at 830.

* The Court below was comfortable with this interpretation

because one other circuit and a number of district courts had

also ruled that a decision not to exclude an area from critica!

habitat was unreviewable. Markle, 827 F.3d at 473-74.

9

Il. THE FIFTH CIRCUIT FAILED TO

ADDRESS THE NONDELEGATION

DOCTRINE.

A. The Nondelegation Doctrine Requires

Congress to Provide Standards to Guide

Agency Actions.

Article | of the Constitution vests all legislative

powers in the Congress of the United States. “That

congress cannot delegate legislative power to the

president is a principle universally recognized as

vital to the integrity and maintenance of the system

of government ordained by the constitution.”

Marshall Field & Co. v. Clark, 143 U.S. 649, 692

(1892); Indus. Union Dep't, AFL-CIO v. Am.

Petroleum Inst., 448 U.S. 607, 673 (1980) (Powell, J.,

concurring). This is known as the nondelegation

doctrine. See Whitman v. Am. Trucking Ass’ns, 531

U.S. 457, 472 (2001) (explaining that Article |

permits no delegation of Congress's legislative

powers).

However, “[i]f Congress shall lay down by legislative

act an intelligible-principle to which the person or

body authorized to [act] is directed to conform, such

legislative action is not a forbidden delegation of

legislative power.” J.W. Hampton, Jr., & Co. v.

United States, 276 U.S. 394, 409 (1928) (emphasis

added). “The intelligible-principle rule seeks to

enforce the understanding that Congress may not

delegate the power to make laws and so may

delegate no more than the authority to make policies

and rules that implement its statutes.” Loving v.

10

United States, 517 U.S. 748, 771 (1996). This Court

has explained that Congress has failed to state an

intelligible-principle if “there is an absence of

standards for the guidance of [an agency’s] action, so

that it would be impossible in a proper proceeding to

ascertain whether the will of Congress has been

obeyed...” Yakus v. United States, 321 U.S. 414,

426 (1944) (emphasis added); Indus. Union Dep't,

448 U.S. at 686 (1980) (Rehnquist, C.J., concurring)

(explaining that the intelligible-principle rule

requires “ascertainable standards” by which a court

can test the exercise of delegated legislative

discretion).

B. The APA § 701(a)(2) Test And The

Intelligible-Principle Rule Are Similar.

As shown above, the test used to determine if APA §

701(a)(2) precludes judicial review requires a court

to determine if Congress has provided a “meaningful

standard” by which to measure an agency's

discretion. If Congress failed to provide a

meaningful standard, then judicial review is

precluded. Similarly, if there is an “absence of

standards” to guide an agencys actions, then

Congress may have failed to provide an “intelligible-

principle”; thereby unconstitutionally delegating

authority to an agency.

Consequently, because of the similarities between

these tests, once a court determines that a statute

does not provide a meaningful standard (precluding

11

review under the APA), it should be on guard for

questions as to the constitutionality of said statute.‘

In the case at hand, by holding that Section 4(b)(2)

lacks a meaningful standard, the Fifth Circuit

triggered a question that it should have answered,

or at the very least acknowledged—“Did Congress

unconstitutionally delegate authority to the

Secretary of the Interior pursuant to Section

4(b)(2)?””

Ill. ESA SECTION 4(b)(2) AND APA

§ 701(a)(2) SHOULD BE HARMONIZED

TO AVOID THE NONDELEGATION

DOCTRINE.

By relying on the canon of constitutional avoidance,

this Court can elude the conundrum presented by

§ 701(a)(2) and the nondelegation doctrine.

‘ Commentators have recognized, there is a clear tension

between APA § 701(a)(2)'s “meaningful standard” test and the

“absence of standard” test the Court has articulated to

determine whether Congress has provided an intelligible-

principle. Viktoria Lovei, Revealing the True Definition of APA

§ 701(ay)(2) by Reconciling "No Law to Apply” with the

Nondelegation Doctrine, 73 U. Cuil. L. REV. 1047, 1060 (2006)

(‘liJf a statute is so broad that it lacks a guiding policy, the

statute may lack an intelligible-principle, in violation of the

nondelegation doctrine.”); see Amee B. Bergin, Does

Application of the APA's "Committed to Agency Discretion”

Exception Violate the Nondelegation Doctrine? 28 B.C. ENVTL.

AFF. L. REV. 363, 396 (2001) (arguing that “[i]f a court finds

that a delegation lacks ‘law to apply,’ it follows analytically

that not only can the court find that the delegation lacks an

intelligible-principle, but that it must do so.”).

12

A. The Canon of Constitutional Avoidance.

As the Court recently stated, “[wjhen ‘a serious

doubt’ is raised about the constitutionality of an act

of Congress, ‘it is a cardinal principle that this Court

will first ascertain whether a construction of the

statute is fairly possible by which the question may

be avoided.” Jennings v. Rodriguez, 138 S. Ct. 830,

842 (2018) (quoting Crowell v. Benson, 285 U.S. 22,

62 (1932)); Edward J. DeBartolo Corp. v. Fla. Gulf

Coast Bldg. & Const. Trades Council, 485 U.S. 568,

575 (1988) (explaining that “where an otherwise

acceptable construction of a statute would raise

serious constitutional problems, [it] will construe

the statute to avoid such problems unless such

construction is plainly contrary to the intent of

Congress”).

Here, interpreting Section 4(b)(2) and § 701(a)(2) to

preclude judicial review raises a serious Article |

issue. However, as illustrated in the sections below,

it is “fairly possible” to construe these statutes in a

manner that allows judicial review.

B. The APA Encourages Judicial Review.

The cardinal rule governing the relationship

between courts and administrative agencies is that

agency action is presumptively subject to judicial

review. Mach Mining, LLC v. E.E.O.C., 135 S. Ct.

1645 (2015) (stating “this Court applies a ‘strong

presumption favoring judicial review of

administrative action”); Sackett v. E.P_A., 566 U.S.

120, 128 (2012) (recognizing the APA “creates a

13

presumption favoring judicial review of

administrative action”); Califano v. Sanders, 430

U.S. 99, 104 (1977) (discussing “Congress’ intention

and understanding that judicial review should be

widely available to challenge the actions of federal

administrative officials”). Together, the avoidance

canon and the presumption of reviewability push

strongly toward enabling judicial review of decisions

not to exclude critical habitat. The panel majority

ignored the reviewability presumption and, in doing

80, “falter[ed] at the starting line.” Markle Interests,

L.L.C. v. U.S. Fish & Wildlife Service, 848 F.3d 635,

653 (5th Cir. 2017) reh’g en banc den.

Off the block the Fifth Circuit read Section 4(b)(2) to

insulate the Service’s negative exclusion

determination from judicial review. It never

applied, let alone recognized, the APA presumption

favoring judicial review or this Courts

interpretation of that presumption. The six-judge

dissent from the denial of rehearing en banc found

the panel’s approach “plays havoc” with the well-

established presumption favoring judicial review

and constitutes an “abdication of our responsibility

to oversee, . . . agency action” for abuse of discretion.

Id. at 652, 654-655 (Jones, J., dissenting).

Congress passed the APA in 1946 in direct response

to concerns over unbridled administrative agency

power. In hearings on the APA, Congressman

Francis Walter, Chairman of the House Judiciary

Committee, in discussing the § 701(a)(2) exception

for matters committed to agency discretion by law,

remarked that agencies “do not have authority in

14

any case to act blindly or arbitrarily.” H.R. 615, 79th

CONG. §10 (1946), reprinted in Administrative

Procedure Act: Legislative History, 92 CONG. REC.

5750 (daily ed. May 24, 1946)(Westlaw). Senator

McCarran, Chairman of the Senate Committee on

the Judiciary, further emphasized the

“indispensable” value of judicial review “since its

mere existence generally precludes arbitrary

exercise of powers.” 92 CONG. REC. 2159 (1946),

reprinted in Administrative Procedure Act:

Legislative History, H. REP. No. 79-1980, at 2201 (2d

Sess. May 3, 1946). In addition, the House Judiciary

Committee noted that all agency decisions are

presumptively reviewable absent clear

congressional intent to withhold that right:

Very rarely do statutes withhold judicial

review. It has never been the policy of

Congress to prevent the administration of

its own statutes from being judicially

confined to the scope of authority granted

or to the objectives specified. Its policy

could not be otherwise, for in such a case

statutes would in effect be blank checks

drawn to the credit of some administrative

officer or board.

S. REP. No. 79-752, at 26 (1st Sess. Nov. 19, 1945).

Congress enacted the APA to capture a wide range

of agency activities. “The legislative material

elucidating [the APA] manifests a congressional

intention that it cover a broad spectrum of

administrative actions, and this Court has echoed

that theme by noting that the [APA’s] ‘generous

15

review provisions must be given a ‘hospitable’

interpretation.” Abbott Labs. v. Gardner, 387 U.S.

136, 140-41 (1967) (internal citations and footnotes

omitted)(abrogated on other grounds by Califano v.

Sanders, 430 U.S. 99 (1977)). Further, “the Court

[has] held that only upon a showing of clear and

convincing evidence of a contrary legislative intent

should the courts restrict access to judicial review.”

Abbott, 387 U.S. at 141 (internal quotation omitted);

see also Japan Whaling Ass’n v. Am. Cetacean Soc’y,

478 U.S. 221, 230 n.4 (1986) (providing that “the rule

is that the cause of action for review of such action

is available absent some clear and convincing

evidence of legislative intention to preclude judicial

review.”) “A restrictive interpretation of [APA § 704]

would unquestionably, in the words of Justice Black,

‘run counter to § 10 and § 12 of the [APA]. Their

purpose was to remove obstacles to judicial review of

agency action under subsequently enacted statutes .

.. .” Bowen v. Massachusetts, 487 U.S. 879, 904

(1988) (quoting Shaughnessy v. Pedreiro, 349 U.S.

48, 51 (1955)).

In Citizens to Preserve Overton Park, Inc. v. Volpe,

401 U.S. 402 (1971), the Court advanced its first

interpretation of the APA’s “committed to agency

discretion” exception to judicial review. Drawing on

the legislative history of the APA the Court

explained that § 70l(a)(2) is a “very narrow

exception . . . applicable in those rare instances

where ‘statutes are drawn in such broad terms that

in a given case there is no law to apply’.” Id. at 410

16

(emphasis added)(quoting S. REP. No. 79-752, at 26

(1945)).6

The presumption of reviewability embodied in the

APA and its relationship to the § 701(a)(2) exception

was further clarified in Chaney. In Chaney, the

Court determined that agency decisions not to

pursue enforcement actions are presumptively

unreviewable absent “law to apply” in the form of

substantive guidelines restricting the agency's

enforcement discretion. “[I]f no judicially

manageable standards are available for judging how

and when an agency should exercise its discretion,

then it is impossible to evaluate agency action for

‘abuse of discretion.”® Jd. at 830.

Chaney, however, is limited to cases involving

agency refusal to initiate enforcement proceedings.

The Court left intact the presumption favoring

judicial review in cases involving agency discretion

not to initiate rulemaking and _ other

5 Similar to the case at hand, the statute in Overton Park

required the Secretary of Transportation to conduct a

balancing of competing interests. Overton Park, 401 U.S. at

413.

® The primary source of a “meaningful standard” for judicial

review is typically the language of the statute at issue.

However, Chaney did not say that a statute is the only source.

The Court only said that a reviewing court must ‘have’ such a

standard. Kenneth Culp Davis, No Law to Apply, 25 San Diego

L. Rev. 1, 4 (1988). In Chaney, the court reviewed the

governing statute for standards or guidelines in addition to the

agency's own policy statements and regulations before

concluding that Congress provided no meaningful standards to

guide its review. Chaney, 470 U.S. at 836, 839, 853.

17

nonenforcement decisions. See Chaney, 470 U.S. at

825 n.2, 833 n.4.

Hence, in contrast to the Fifth Circuit's

interpretation of § 701(a)(2), the APA’s legislative

history and Supreme Court precedent support a

narrow reading of § 701(a)(2).

C. The Fifth Circuit Misread Section 4(b)(2)

and § 701(a)(2).

The Fifth Circuit found that Section 4(b)(2)

“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.”

Markle, 827 F.3d at 474. This conclusion has a

textual and a structural problem.

Textually, the APA does not require a claimant to

establish a mandatory duty unless a decision

compelling action unlawfully withheld is sought

pursuant to 5 U.S.C. § 706(1). Norton v. S. Utah

Wilderness All., 542 U.S. 55, 63-64 (2004).

Structurally, the Fifth Circuit erroneously

concluded that the presence of some discretion to

exercise meant that the entire action was committed

to agency discretion by law. Courts that find an

action is committed to agency discretion invoke a

fully optional process, such as _ prosecutorial

discretion, Chaney, 470 U.S. at 831-32, or

environmental review, Burbank Anti-Noise Grp. v.

Goldschmidt, 623 F.2d 115, 116 (9th Cir. 1980)

18

(holding that adequacy of an Environmental Impact

Statement was not reviewable where no statement

was required). Section 4(b)(2) provides a specific

threshold for the exercise of discretion “if [the

Service] determines that the benefits of such

exclusion outweigh the benefits of specifying such

area as part of the critical habit.” It also provides a

limit to the discretion: “unless [the Service]

determines, based on the best scientific and

commercial data available, that the failure to

designate such area as critical habitat will result in

the extinction of the species concerned.” Jd. This

gives ample guidance to determine whether the

Service relied on factors which Congress has not

intended it to consider, entirely failed to consider an

important aspect of the problem, offered an

explanation for its decision that runs counter to the

evidence, or is so implausible that it could not be

ascribed to a difference in view or the product of

agency expertise.

The policy concerns that underlay other cases on

discretion do not apply here. In the usual situation,

“when an agency’ refuses to act it

generally does not exercise its coercive power over

an individual's liberty or property rights, and

thus does not infringe upon areas that courts often

are called upon to protect. ...” Chaney, 470 U.S. at

832. But here, the converse applies: the agency's

decision not to exclude critical habitat results in the

exercise of coercive power over those who would use

the subject property. Jnfra pp. 21-26. And the

decision not to exclude is part of a larger regulation

which is an appropriate subject of review.

19

On its face, moreover, the Service's finding here does

not comply with the mandate of ESA Section 4(b)(2).

Section 4(b)(2) requires the Service to take into

account the economic impact, and any other relevant

impact, before designating critical habitat.

Exclusion may occur if the benefits of an exclusion

outweigh the benefits of designation. 16 U.S.C.

1533(6)(2). Simply disregarding economic impacts

as not “disproportionate” to the designation does not

weigh the economic and other impacts against the

(slight) benefits of designation. Instead, it implies

that no matter the size of the economic impacts, they

are acceptable if not out of line with the scope of

economic impacts from other critical habitat

designations. The ESA does not allow the Service to

shift its own goalposts like this. Instead, it requires

an individualized inquiry to ensure the economic

and other impacts of the specific designation are

taken into account.

D. The Fifth Circuit's Opinion is Internally

Inconsistent.

Leading up to the designation of gopher frog critical

habitat, the Service prepared a draft and a final

econc™ic analysis. Between the draft and final the

Service had two rounds of comments. 77 Fed. Reg.

at 35,140. The final economic analysis quantified

the impacts of the designation on the following

activities: active species management, residential

and commercial development, timber management

and military activities. Jd. For these activities, the

Service quantified the costs for 20 years under three

different scenarios. /d. But it did not monetize or

20

quantify any economic benefits. And in the end, the

Service concluded that there were not “any

disproportionate costs that are likely to result from

the designation” of Unit 1. /d. at 35,141.

According to the Fifth Circuit, Section 4(b)(2) does

not provide a “meaningful standard” by which to

review the Service's conclusion. However, the court

also held that “[sjection 1533(b)(2) articulates a

standard for reviewing the Service's decision flo

exclude an area.” Markle, 827 F.3d at 474 (emphasis

added). Thus, if the Service had conducted the exact

same analysis as summarized above, but in the end

excluded Unit 1 because the costs were

disproportionate, the court would review that

decision.’

In other words, it is the action taken by the Service

in response to Section 4(b)(2) that determines

whether 4(b)(2) provides a “meaningful standard.” If

the Service excludes an area, then the words in

Section 4(b)(2) provide a meaningful standard.

However, if it decides not to exclude that same area,

then those same words provide no meaningful

standard. This is inconsistent with the lower court's

statement that the words of the statute (not the

ultimate decision) fail to provide a meaningful

standard. /d. (providing that the “statute is silent

’ The Court of Appeals for the Ninth Circuit has also failed

to recognize the inconsistency and held the decision to exclude

an area is reviewable. Bear Valley Mut. Water Co. v. Jewell,

790 F.3d 977, 989 (9th Cir. 2015); Bldg. Indus. Ass'n of the Bay

Area v. U.S. Dep't of Commerce, 792 F.3d 1027, 1034 (9th Cir.

2015).

21

on a standard for reviewing the Service's decision

to not exclude an area.”)

The Court can avoid the internal inconsistency

produced by the Fifth Circuit's reasoning by holding

that judicial review is available whether the Service

decides to exclude an area or not to exclude an area

from designation.

E. Agency Action that Constrains The Use

of Private Property Must be Subject to

Judicial Review.

The Fifth Circuit’s opinion begins with a discussion

of the “misconceptions” about the impacts of critical

habitat designations on private property. The court

explains that a designation does not convert private

property into a public park or wildlife refuge, open

the door to species reintroductions or mandate land

management practices in favor of listed species.

Markle, 827 F.3d 452 at 458. While a designation

itself may not immediately restrict particular land

uses, it does place the Service in a superior position

to extort unjustified concessions from landowners

seeking a federal permit or other federal approval.

It is this coercive power that accompanies a

designation, or decision not to exclude under Section

4(b)(2), that warrants judicial review. 16 U.S.C. §

1533(b)(2). Otherwise, property owners are left with

“little practical alternative but to dance to the

[Service’s] tune.” Sackett, 566 U.S. at 132 (2012).

In a unanimous decision, this Court in Sackett

overturned decades of uniform case law prohibiting

judicial review of EPA and United States Army

22

Corps of Engineers (“Corps”) compliance orders.

After filling in a portion of their property in

preparation for the construction of a family home,

the Sacketts received an EPA compliance order. The

order directed them to immediately “restore” their

property and give EPA access to their property and

records. Id. at 125. The Sacketts had good reason to

doubt the presence of “jurisdictional wetlands,” but

no means to mount a challenge. Like so many courts

before it, the Ninth Circuit had found that the CWA

precluded the review of compliance orders. Sackett

v. E.P_A., 622 F.3d 1139, 1147 (9th Cir. 2010).

The Sacketts faced a dilemma. Ignore the order and

wait to be sued to get their day in court, all the while

racking up to $75,000 in daily penalties, or halt

construction and engage in expensive restoration

work to comply with an order they believed to be

invalid. The EPA suggested this was a tolerable

choice because compliance orders simply “provid{e]

a means of notifying recipients of potential

voluntary compliance” as opposed to serving as a

“coercive sanction that itself must be subject to

judicial review.” Sackett, 566 U.S. at 128-129

(emphasis added).

This Court held that the APA entitled the Sacketts

to immediately challenge EPA’s compliance order.

In doing so, the Court dismantled several arguments

advanced by the EPA regarding why the statutory

scheme of the CWA impliedly precludes review. It

found that nothing in the CWA’s statutory scheme

was enough to overcome the APA’s strong

23

presumption of reviewability. /d. at 128. Nor was

this Court moved by EPA’s claim that agency

efficiency would be undercut if orders were subject

to judicial review, stating “[t]}he APA’s presumption

of judicial review is a repudiatior of the principle

that efficiency of regulation conquers all.” Jd. at 130.

The opinion concluded with a warning to

overzealous EPA officials: “[T]here is no reason to

think that the Clean Water Act was uniquely

designed to enable the strong-arming of regulated

parties into ‘voluntary compliance’ without the

opportunity for judicial review .. .” Jd. at 130-131.

Four years following Sackett this Court continued its

trend of judicial skepticism of agency actions having

immediate practical consequences on landowner

rights with no reasonable opportunity for review.

With a unanimous vote, the Court held that a Corps’

“jurisdictional determination” (“JD”) is final agency

action open to immediate challenge under the APA

§ 704. U.S. Army Corps of Ena’rs v. Hawkes Co., 136

S.Ct. 1807 (2016).

Hawkes Co., a peat mining firm, applied for a Corps

permit to “fill” a portion of its 530-acre property.

Corps officials urged Hawkes to abandon the

permitting process, citing extended delays, high

costs and an uncertain outcome. When Hawkes

refused to back off the permitting process which, if

successful, could extend its peat mining operations

up to 15 years, Corps officials again discouraged

Hawkes from moving forward. Agency officials told

a Hawkes employee to “start looking for another

job,” buried the landowner with paperwork demands

24

costing upwards of $100,000 and urged the sale of

the property to a “wetlands bank.” Hawkes Co., Inc.

v. U.S. Army Corps of Eng’rs, 782 F.3d 994, 998 (8th

Cir. 2015).

Following a two-year delay, the Corps issued an

approved JI) concluding that Hawkes’ property

contained “waters of the United States” based on a

“significant nexus” between wetlands and the Red

River of the North located some 120 miles away. /d.

Not unlike the landowners in Sackett, Hawkes

disagreed with the agency’s decision and faced an

unreasonable choice: (1) abandon its peat-mining

operations; (2) apply for and obtain a permit at

immense cost, long delay and likely agency-imposed

limitations on the full use of the property; or (3)

ignore the JD and proceed with mining operations at

the risk of significant civil fines and potential

criminal penalties. Jd. at 997.

Hawkes filed suit seeking judicial review of the JD

under the APA. In allowing judicial review, the

Eighth Circuit remarked on the “coercive effect” of

an agency-issued JID) which “adversely affects

appellants’ right to use their property in conducting

a lawful business activity.” Hawkes, 782 F.3d at

1000-1001. It further explained:

The prohibitive costs, risk, and delay of

these alternatives to immediate judicial

review evidence a transparently obvious

litigation strategy: by leaving appellants

with no immediate judicial review and no

adequate alternative remedy, the Corps

25

will achieve the result its local officers

desire, abandonment of the peat mining

project, without having to test .. . its

expansive assertion of jurisdiction . . . .

Id. at 1001-1002.

This Court unanimously affirmed the Eighth

Circuit’s ruling that Hawkes was entitled to judicial

review under the APA. The Court reasoned that a

“negative” determination regarding the presence of

jurisdictional waters creates a five-year “safe

harbor” shielding property owner from federal

prosecution. Conversely, a positive determination

triggers legal consequences through the deprivation

of that safe harbor. Hawkes, 136 S.Ct. at 1814.

Furthermore, it emphasized the APA’s presumption

of reviewability for all final agency actions. /d. at

1816 (citing Sackett, 566 U.S. at ----).

The concerns the Court had in Sackett and Hawkes

apply equally here. In both prior cases, the Court

recognized the agencies’ coercive power is amplified

absent judicial review. Here, the Service’s refusal to

exclude Unit 1 on the basis of economic impact

solidifies federal control over the property owners’

future development activities to the extent those

activities require a federal permit or approval. The

economic impacts of the federal control are

enormous? and this gives the Service “extraordinary

leverage” over the owners of Unit 1. Tr. of Oral

* Supra pp. 6.

26

Argument at 48, U.S. Army Corps of Eng’rs v.

Hawkes Co., 136 S.Ct. 1807 (2016) (No. 15-290).°

Furthermore, in Hawkes the Court recognized that

a negative JD gave the property owner a “safe

harbor’ and therefore, a positive JD had negative

consequences.’ The same is true here. If the

Service had excluded Unit | from the designation,

then ESA Section 7 would not have any impacts on

the landowners’ future plans (i.e. a safe harbor from

Section 7). Thus, following the reasoning in Hawkes,

a decision not to exclude Unit 1 denies the

landowner the benefits of that safe harbor. And

according to the Fifth Circuit, the Service may deny

that safe harbor free from the oversight of judicial

review.

This Court should continue its recent practice to

closely examine the possibility that, when shielded

from judicial review, government agencies may use

their superior strength to demand unjustified

concessions from landowners through constraints on

the use of private property. In Sackett and Hawkes

this Court unanimously rejected such abuse by the

EPA and Corps. It should apply the same check on

the Service here.

* The Service recognized that designation of Unit 1 would

interfere with planned development, but “hope|s] to work with

the landowners to develop a strategy that will allow them to

achieve their objectives for the property’ while extending

protections for the non-existent gopher frog and its non-

habitat. 77 Fed. Reg. at 35,123. The Service's suggestion is

disingenuous, as the landowner has little practical alternative

but to “work with” the Service.

© =Supra p. 25.

27

F. Judicial Review of Section 4(b)(2) Is

Essential to Provide Accountability for

Designations Much Larger and More

Consequential than Unit 1.

Unit I's designation has imposed negative

consequences on the owners of the parcel and the

community of St. Tammany Parish. Yet such

consequences pale in comparison to landscape-scale

impacts from critical habitat designations similarly

shielded from judicial review.

One such designation is critical habitat for the

northern spotted owl. Across Oregon, Washington,

and California, the Service designated 8.5 million

acres of critical habitat for the owl in 2012. U.S. Fish

& Wildlife Service, Endangered and Threatened

Wildlife and Plants; Designation of Revised Critical

Habitat for the Northern Spotted Owl (Strix caurina

occidentalis), 77 Fed. Reg. 71,876 (Dec. 4, 2012). Of

the lands designated as critical habitat, more than

2.6 million acres are “matrix lands,” which were set

aside under the Northwest Forest Plan (“NWFP”) to

provide a steady supply of federal timber to the local

forest products-based economy. 77 Fed. Reg. at

71,876; id. at 71,880 (noting that “matrix areas [are]

where timber harvest would be the goal.”). The

Service concluded that “economic impacts to [Forest

Service] timber harvest are relatively more likely in

unoccupied matrix lands or approximately 1,158,314

acres of 2,629,031 total acres of all [Forest Service]

matrix lands.” 77 Fed. Reg. at 72,028. The resulting

decrease in timber supply is substantial. /d.

28

To place this in context, the Service’s 2012 rule

designated over 65% of the “matrix” lands as ow!

critical habitat. U.S. Forest Service and US.

Bureau of Land Management, Record of Decision for

Amendments to Forest Service and Bureau of Land

Management Planning Documents Within the Range

of the Northern Spotted Owl, April 13, 1994 “(NWFP

ROD”) at 7.'! This despite the fact that the NWFP

already set aside about 20 million acres in the form

of Late Successional and Riparian Reserves and

other land allocations. See NWFP Standards and

Guidelines, at A-5. Such reserves already included

areas that “will maintain a functional, interactive,

late-successional and old-forest growth ecosystem.”

NWFP ROD at 6.

In attempting to resolve disputes relating to forest

management, the NWFP promised, in President

Clinton’s words, to “produce a predictable and

sustainable level of timber sales . . ." NWFP ROD at

3. The Forest Service concedes the NWFP was

expected to “provide predictable levels of resource

outputs and recreation opportunities, which would

in turn provide predictable levels of employment.

This was not achieved with respect to timber supply.”

U.S. Forest Service, Social and Economic Status and

Trends, Northwest Forest Plan: The First 20 Years,

Report, Report No FS/R6/PNW/2015/0006, Feb.

2016, at 57 (emphasis added). Not surprisingly, the

failure to offer stable timber supply coincided with

" Documents relating to the NWFP are available

electronically at the website of the Regional Ecosystem Office,

https: / /www.fs.fed.us/r6/reo/nwfp/documents/ (last visited

April 25, 2018).

29

substantial downturns in rural population and

vibrancy. See id. at 39 (showing metropolitan

population increase by 8 percent since 1994 and

nonmetropolitan decrease by 10 percent). President

Clinton’s promise to rural communities was not met.

In revising the critical habitat for the spotted owl,

the Service disregarded the economic dislocation

that had already occurred and waved away concerns

about continued disruption.

The Service concluded “only a portion of the overall

proposed revised designation will result in more

than incremental, minor administrative costs.” 77

Fed Reg. at 71,946. It further discounted economic

effects by claiming there could be positive or

negative effects. Id. at 71,947. But the Service did

not exclude a single acre based on economic effects,

instead exercising its Section 4(b)(2) discretion only

to exclude areas under conservation agreements,

programs and partnerships. /d. at 71,890. The

Service concluded its analysis with the following

remarkable assertion:

While there is uncertainty over whether

such [economic] impacts will occur and to

what extent, even assuming higher

economic impacts suggested by some

commenters, we would not exclude these

lands from designation under section

4(b)(2) because a_ critical habitat

designation on these [matrix] lands will

have benefits in conserving this essential

habitat.

77 Fed. Reg. at 71,947. By a logical reading of

Section 3(5)(A), all critical habitat must have some

sort of conservation benefit. 16 U.S.C. § 1532(5)(A).

But under the Services’ approach, federal lands with

any conservation benefit whatsoever would not be

excludable. Thus, the non-reviewability of exclusion

decisions allows the agency to rewrite the governing

statute.

Meaningful economic analysis is feasible. For

example, the first spotted owl critical habitat rule,

issued in 1992, recognized “the overall effects on the

Northwest timber industry and to some counties in

particular, were potentially severe ...” U.S. Fish &

Wildlife Serv., Endangered and Threatened Wildlife

and Plants; Determination of Critical Habitat for the

Northern Spotted Owl, 57 Fed. Reg. 1796, 1807 (Jan.

15, 1992). As a result, the first designation excluded

some federal lands to mitigate the worst job losses.

Id. at 1807-08.

The Service also made use of its powers to coerce

changes to governing land use plans. The final rule

explained that it “does not change land use

allocations or Standards and Guidelines for

management under the NWFP.” 77 Fed. Reg. at

71,880. In the same breath, however, the Service

asserted conservation outside NWFP reserves “is

increasingly important for species recovery.” Id. at

71,881. In essence, the Service arrogated to itself

the authority to rewrite the governing Forest Plan

without the public process that normally

accompanies such initiatives. See 16 U.S.C. § 1604;

31

Ohio Forestry Ass’n, Inc. v. Sierra Club, 523 U.S.

726, 729-30 (1998).

Even where its critical habitat designation is subject

to challenge on the merits, the Service has denied

the existence of economic impacts in disputing the

standing of affected stakeholders. Although the

Service initially obtained a dismissal of a challenge

to the spotted owl critical habitat rule, Carpenters

Indus. Council v. Jewell, 139 F. Supp. 3d 7 (D.D.C.

2015), the D.C. Circuit reversed. The Circuit Court

held “the Service’s designation will likely cause a

decrease in the supply of timber from designated

forest lands.” Carpenters Indus. Council v. Zinke,

854 F.3d 1, 6 (D.C. Cir. 2017). The court further held

the Services’ “argument to the contrary belies the

text, purpose, and operation of the Final Rule

designating the critical habitat in this case. Not to

mention, it defies basic common sense.” /d.

On a number of occasions, the Service has unduly

discounted, or denied altogether, the negative

impacts of its critical habitat designations. This

refusal to acknowledge economic impacts has been

insulated from judicial review by decisions like the

one below. Providing for judicial review will ensure

that the heavy hammer of critical habitat

designation does not swing blindly.

CONCLUSION

The Fifth Circuit's decision to withhold judicial

review raises serious constitutional issues under the

nondelegation doctrine. There are, however, ample

32

reasons to harmonize APA § 701(a)(2) and ESA

Section 4(b)(2) to allow for judicial review. Thus, the

Court should avoid the constitutional question, and

reverse the lower court’s decision.

Dated: April 30, 2018

/s/ Thomas J. Ward

THOMAS J. WARD *

NATIONAL ASSOCIATION

OF HOME BUILDERS

1201 15th Street, N.W.

Washington, D.C. 20005

(202) 266-8230

* Counsel of Record