Petition for Writ of Certiorari — Arizona Cattle Growers' Ass'n v. Salazar

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In aperrice OF THE CLERK

Supreme Court of the Anited States

ARIZONA CATTLE GROWERS’ ASSOCIATION,

Petittoner,

VS.

SALAZAR, et al,

Respondents

On Petition For Writ Of Certiorari

‘To The United States Court Of Appeals

For The Ninth Circuit

eee ae

PETITION FOR WRIT OF CERTIORARI

NORMAN LD. JAMES

Counsel of Record

KFENNEMORE CRAIG, PC

3003 North Central Avenue

Suite 2600

Phoenix, AZ 85012 2913

(602) 916-5346

njyames@{claw.com

‘THOMAS J. WARD

NATIONAL ASSOCIATION OF

HOME BUEHLDERS

1201 15th Street, NW

Washington, D.C. 20005-2800

(202) 266-8200

Counsel for Petitioner Arizona

Cattle Growers’ Association

COCKLE LAW HRIEF PRINTING CO. (800) 225-6964

OR CALL COLLECT (40?) 342-2831

QUESTIONS PRESENTED

Under § 4 of the Endangered Species Act (“ESA”),

16 U.S.C. § 1533, the Fish and Wildlife Service

(“FWS”) designated more than 8.6 million acres of

federal land in four states as “critical habitat” for

the Mexican spotted owl. Despite stating in its

rulemaking that that there are only 1,176 to 2,352

known owls, FWS concluded that all of this land 1s

occupied by owls. To analyze the economic impacts of

designating critical habitat, FWS used the “baseline”

approach, under which it ignored impacts to land and

resource users related to the species’ listing. The

agency concluded that there would be no tmpacts

from designating critical habitat other than a small

amount of administrative costs. The Ninth Circuit

Court of Appeals upheld the agency’s action,

including its use of the baseline approach, even

though that methodology has been rejected” by

another circuit as contrary to the ESA. The questions

presented are:

1. Was FWS required to analyze and consider all of

the economic impacts that result’ from

designating particular areas as critical habitat

under ESA § 4(b)(2), including impacts that also

may be related to the species’ listing?

2. Was it lawful for the Ninth Circuit to substitute

its own rationale for the rationale provided by

FWS in- order’ to’ affirm’ the — agency’s

determination that all 8.6 million acres of critical

habitat are occupied by owls?

PARTIES TO THE PROCEEDING

The petitioner is the Arizona Cattle Growers’

Association. The respondents are Ken Salazar, the

Secretary of Interior; the Department of the Interior;

Rowan W. Gould, Acting Director of the Fish and

Wildlife Service;' the Fish and Wildlife Service; and

the Center for Biological Diversity, which intervened

in proceedings below to support the government’s

action.

The New Mexico Cattle Growers Association

submitted a brief to the Ninth Circuit Court of

Appeals as amicus curiae in support of petitioner

addressing the lawfulness of FWS’s analysis of the

economic impacts of designating critical habitat.

CORPORATE DISCLOSURE STATEMENT

The Arizona Cattle Growers’ Association is a non-

profit Arizona corporation whose members consist of

cattle ranchers and associated businesses in Arizona.

It has no parent corporation or subsidiaries, and has

issued no shares of stock to the public.

Mr. Gould is substituted for former Director H. Dale Hall

pursuant to Supreme Court Rule 35.3

TABLE OF CONTENTS

QUESTIONS PRESENTED ................ 0.0... cc ceeeee eens

PARTIES TO THE PROCEEDING ....................... Ml

CORPORATE DISCLOSURE STATEMENT ........ 11

PETITION FOR WRIT OF CERTIORARI ............ I

CITATIONS OF REPORTS OF OPINIONS

ENTERED IN THE CASE.......................... anal l

BASIS KOR SUPREME COURT

Fis Panes Ce ao vavccigitisstianeaias ssa fdeMen aes l

STATUTORY PROVISIONS INVOLVED IN THE

SPRINT sax uns cesencunyabuweesscuncubenysaaeiaes awa asa tee 2

STAT ENGIN © OR THE, CAS. ...05.ccccccccnsscsnscveseccense 2

I OVERVIEW OF THE CASE...................... : 2

ill. THE ADMINISTRATIVE PROCEEDINGS

CONCERNING THE CRITICAL HABITAT

LPR Ia PORN REI iacsvicu) cccadeacecdedesectuiventaaieinaamans 4

A. Background on the Mexican Spotted

GUE sacncycctccuansausvecscesedese eater eee ee eee A

83. Prior Attempts to Designate Critical

of | See daxupsuudaeeausiveteneveenaes 6

C. The 2004 Critical Habitat Rule ............ 7

Il. THE COURT PROCEEDINGS BELOW .... 11

A. The District Court’s Decision................ 11

B. The Ninth Circuit’s Opinion ................. 12

TABLE OF CONTENTS ~— Continued

REASONS FOR GRANTING THE PETITION.....

ITT.

THIS CASE PRESENTS IMPORTANT

LEGAL QUESTIONS CONCERNING

THE ROLE OF CRITICAL HABITAT

UNDER THE ENDANGERED SPECIES

PERE ois od nda evsnaseaeeetininsenvsaerdicrausa nee ae

THk COURT SHOULD RESOLVE THE

CONFLICT BETWEEN THE NINTH AND

TENTH CIRCUIT COURTS OF APPEALS

REGARDING THE REQUIREMENTS

IMPOSED BY ESA § 4(b)(2)....................008.

A. Statutory and Regulatory Background ...

B. The “Baseline” Approach and the Tenth

Circuit’s Decision in New Mexico Cattle

aac ccnticcssisaecinataknssenisianctereates

C. Gifford Pinchot and Subsequent Cases

Rejecting New Mexico Cattle Growers ....

D. The Ninth Circuit’s Opinion Should Be

NI soc cuvuceeccsusnsssccunaavess suduneustpenieaies

THE COURT SHOULD REVIEW THE

NINTH CIRCUIT’S UNLAWFUL SUBSTI-

TUTION OF ITS OWN REASONING TO

SUPPORT THE AGENCY’S CRITICAL

HABITAT DESIGNAPION .................0.-2c00

A. Statutory and Regulatory Background ...

TABLE OF CONTENTS — Continued

Page

B. The Court Should Review the Ninth

Circuit’s Determination that All 8.6

Million Acres of Critical Habitat Are

CPOE OF SRWVED inva irinkicdcsisvrlccctacdceess. OO

CONCLUSION ......... aneesuneeees 39

TABLE OF CONTENTS — Continued

Page

APPENDIX

OPINION SOUGHT TO BE REVIEWED

Ariz. Cattle Growers’ Ass'n v. Salazar, 606 F.3d

RFE, BME caves sssxcvssuscctusescsasiansscssensene App. 1

DISTRICT COURT OPINION AND ORDER

Ariz. Cattle Growers’ Ass’n v. Kempthorne, 534

FE. Supp. 2d 1013 (D. Ariz. 2008)....... SRC EES App. 35

AGENCY RULE REVIEWED ON APPEAL

Final Designation of Critical Habitat for the

Mexican Spotted Owl, 69 Fed. Reg. 531°2

I Docs cp ivn tin caligeaidevucsveecsanssniens sess App. 82

STATUTES

I eR as cad cn'saeusduyses seaneseasvanevecss App. 339

16 U.S.C. § 1533(a)(1)............. Sesilevneuats or couseecs App. 340

Se RR a BPE ER ssc csnsvessdessensencesvncsscess App. 340

Be ee BROCCO EA) vnvscescncvcsasesesescnenssaneess App. 341

16 U.S.C. § 1533(bX2)......... Mth ee edevate ea diaeeiaa App. 341

REGULATIONS

IM Fons nsnsncdne bactsarsecsasaveaeessunnt App. 342

BO C.F.R. § 424.02(d)...0cccccccccccceccsccececessesteseeeee App. 342

TABLE OF CONTENTS -- Continued

Page

eee A eee ee

50 CLFR. § 424.19 ooocccccccccccccscsceseeceseesseseeseeseeeen App. 346

LEGISLATIVE HISTORY

H.R. Rep. No. 95-1625 (1978)................csscseeee. App. 347

. BOD: INO. BO-7S CUB 7G) vicscccssnsccrscersasscvcsescoes App. 358

Congressional Record, Oct. 14, 1978 (House

Consideration and Passage of H.R. 14104,

Me PIII oo 40s ccnaccssccucacedecsdacvecssors App. 362

Thee. WOR. INO. BF CIGD) occ cesincecivcisccccecscces App. 372

MISCELLANEOUS PORTIONS OF THE RECORD

U.S. Dep't of Interior, Fish and Wildlife Service,

Recovery Plan for the Mexican Spotted Owl

(Strix occidentalis lucida) (1995).................. App. 380

U.S. Dep't of Interior, Fish and Wildlife

Service, Environmental Assessment for

Designation of Critical Habitat for the

Mexican Spotted Owl (Aug. 18, 2004)......... App. 415

Vl1ll

TABLE OF AUTHORITIES

Page

CASES

Am. Textile Mfrs. Inst., Inc. v. Donovan, 452

a a ace cebanasaseces puaohnu be texsvesee

Ariz. Cattle Growers’ Ass’n v. Kempthorne, 534

P, SUDO. SA LORS CL. APIS. BOG) cvcccecseccocvccsccsesssscecess 1

Ariz. Cattle Growers’ Ass'n v. Salazar, 606 F.3d

eS oc susunsaubeebuseucececeaucees ]

Ariz. Cattle Growers’ Ass’n v. U.S. Fish and

Wildlife Serv., 273 F.3d 1229 (9th Cir. 2001) ...18, 27

Bennett v. Spear, 520 U.S. 154 (1997) ....... 4, 17,33, 38

Burlington Truck Lines, Inc. v. United States,

ee ee a Sa aiidiidanscdcuucyaivesvenkucisvedscocasucnssescsouee

Cape Hatteras Access Pres. All. v. Dep’t of

Interior, 344 F.Supp.2d 108 (D.D.C.

Neh intel ao cateasataduasacsnenercayencaacunibeusens 24, 33, 35

Catron County Bd. of Comm’rs v. U.S. Fish and

Wildlife Serv., 75 F.3d 1429 (10th Cir. 1996) .....6, 23

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

BRIE SRC Raa ta mae Sos Speake had Ree aS See 12

Ctr. for Butological Diversity v. BLM, 422

PF. Supp. 2a 1116 (N.D. Cal. 2006) ........ccccsccsssseseess 24

Ctr. for Biological Diversity v. Norton, 240

F. Supp. 2d 1090 (D. Ariz. 2003)..................cesceeeeceees 7

Defenders of Wildlife v. Flowers, 414 F.3d 1066

ST es ass asbbauiteaiekin ss 18, 27

Douglas County v. Babbitt, 48 F.3d 1495 (9th

RT oes cecal or Ais dual cst sow aswanaraanencante oes 7

TABLE OF AUTHORITIES — Continued

Page

FDA v. Brown & Williamson Tobacco Corp.,

S29 U.S. TO Ce rar ibncescsnccccsescccees. ee

Fund for Animals v. Rice, 85 F.3d 535 (11th Cir.

b.) Er ee 9

Gifford Pinchot Task Force v. U.S. Fish and

Wildlife Serv., 378 F.3d 1059 (9th Cir. 2004) ..... passim

Home Builders Ass’n of N. Cal. v. Norton, 293

BF. Supp. Bel F CE Be ee aaeecsssavcccsccessccscsccccees 23

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

Wildlife Serv., 268 F. Supp. 2d 1197 (E.D.

Cal. 2008) ...<:<ssceecesaeneeaerecabsassesss ae 23

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

Wildlife Serv., F.3d , 2010 U.S. App.

LEXIS 16439 (9th Cir. Aug. 9, 2010)...................... 25

Motor Vehicle Mfrs. Ass’n v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29 (1983)................. 4, 34, 38

NRDC v. U.S. Dep’t of the Interior, 113 F.3d

L121 (SER COM, Bib ea iiesccccasccccccccees. 29

Nat'l Ass’n of Home Builders v. Defenders of

Wildlife, 551 U.S. 644 (2OOT) ..........ccccesecscecesvees 16, 28

N.M. Cattle Growers Ass’n v. U.S. Fish and

Wildlife Serv., 248 F.3d 1277 (10th Cir.

ZU 1 ) . 020 000ccecessesenni anil EITTL GEN Necsavesvecses passim

Rapanos v. United States, 547 U.S. 715 (2006)......... 17

TABLE OF AUTHORITIES — Continued

Page

SEC v. Chenery Corp., 332 U.S. 194 (1947)...............34

Tennessee Valley Authority v. Hill, 437 U.S. 153

EIEN IED novices dasedecuablesssuseensaceteasdveciesiy eimai aaaanmaaatie 16

STATUTES

DS Wa @ ee OR, dicatiiccccaniditieninnsennen passim

2G Ess 6 Bee 0 BR icine 2

st Bee Fem Df eS |) nee.

BO EF Renee Se IMACS uesenecenscuasscevsavaensencausaneans 11, 31

ee ede. EE ccnvsriaaivecdecastinchacsnounctensDeacstmaantans 18, 29

BD Cotte Oe I Pikcnscccatunsecesricenseencosemssnomesiannal 26

AD UF Bo BS Biexsncevcncsnsctececcusnvasgaucatassananaeas 9, 29

RG UF ese © De Mado esccccesccesecsscaccsssessceess 16, 26, 28

16 U.S.C. § 1533(a)(3)(A)(Q) .......... ibapekanuaiuaeie ashaeuaeeaans 29

RE UE Beats © cards ves cecccancsssasasiatuctotnasoneees passim

BE EF Fe Se Discssnneisincusssstaciasscsaniantesne 9

RG EF EGS. B Re iresaketectsscersscsansessertsinianaienmen 9

BG UFC. B Re a ecw nccccencccnnscccnvsssscanscsenzesceserenes 7

RG EI FA AS. B Re) cnvnncccscececcnccsisssatssbnccavsutnecences 28

BD EF ae RIE Dice evnacoddaiuececsenisais nacsentacsageeaeee 9

BD Se ae ED cenccccossnnésuccaccduakeuisstanantencannaaee passim

Be A) es © Re Poin siccssccvccccsiccsescocssatecetansae passim

BD EF Code FRc osscncaccevcossvecceccesscnusseavevsevsasmisetaoeann 2

TABLE OF AUTHORITIES — Continued

28 U.S.C. § 1254(1).... oo

28 U.S.C. § 2101(c) |

42 U.S.C. § 4321 et seq 26

LEGISLATIVE HISTORY

H.R. Rep. No. 95-1625 (1978), reprinted in 1978

Rf Faded % . Rperremene ae ....20, 32

H.R. Rep. No. 7-567 (1982), reprinted in 1982

U.S.C.C.A.N. 2807............ ssa sibtadansouen ere 20

S. Rep. No. 95-874 (1978) . 32

REGULATIONS

50 C.F.R. § 17.11(h) 4

50 C.F.R. § 17.95(b)..... ee

50 C.F.R. § 402.02.. ht, oe

BO C.F .B. S 40B.164 .....cccccees. cee

50 C.FLR. § 402.14(h) eb

50 C.F.R. part 424.... iheasedahshaieaaeeanmimeeian 20

50 C.FR. § 424.12............. Pe tate ee ————.

50 C.F. .R. § 424.12(a)......... | ..16

50 C.E.R. § 424.12(a)(1)......... | SOLER COROORETE

50 C.F-R. § 424.12(a)(1)(ii)............... * susesendlll

00 C.FLR. § 424.12(e)..... sesbeaneuinasvesastesedobanssenl ay aaa ae

pat fs RF . > Snr peer ee ssccceeelsy SO

TABLE OF AUTHORITIES — Continued

Page

50 C.F.R. § 424.17(b)(2) ............ caaaneieneats reves LOWLY

50 C.F.R. § 424.19............ jraoiaa sanacunanes 3, 21

AGENCY RULEMAKING

Determination of Critical Habitat for the

Mexican Spotted Owl, 60 Fed. Reg. 29914

Sn ee a uaneanaaaendaindaeanae, ee 6

Final Designation of Critical Habitat for the

Mexican Spotted Owl, 66 Fed. Reg. 8530

a MR) eR pa rl isc eh Sy eT ¥

Final Designation of Critical Habitat for the

Mexican Spotted Owl, 69 Fed. Reg. 53182

Se WE, SEED sk sshcuseboesddabsrassadsscssntensiaisaesienents passim

Final Determination of Critical Habitat for the

Southwestern Willow Flycatcher, 62 Fed.

FOR. TDOISS (FULY ZA, LOOT a. ccecccsccescccceccseccesevees 21, 22

Final Rule to List the Mexican Spotted Owl as

Threatened Species, 58 Fed. Reg. 14248 (Mar.

ee RRR nach Bagh ORDO eS RR TE PRD 4,5,6

Interagency Cooperation Regulations; Final

Rule, 43 Fed. Reg. 870, (Jan. 4, 1978)....................32

Listing Endangered and Threatened and

Designating Critical Habitat; Amended

Procedures to Comply with the 1982

Amendments to the Endangered Species Act,

49 Fed. Reg. 38900 (Oct. 1, 1984) ......cc0..00000--.--20, 21

X11]

TABLE OF AUTHORITIES — Continued

Page

Revocation of Critical Habitat for the Mexican

Spotted Owl, Loach Minnow, and Sptkedace,

63 Fed. Reg. 14378 (Mar. 25, 1998).......... 6

COURT RULES

Supreme Court Rule 13.3........ ,

OTHER AUTHORITIES

Arizona Statistical Abstract 2003 Data

Handbook (Pia Montoya ed.) (2008)............. 18

Endangered Species Act Amendments of 1978,

Pub. L. No. 95-632, 92 Stat. 3751 (1978).....19, 31, 33

George Cameron Coggins, “A Premature

Evaluation of American Endangered Species

Law,” Endangered Species Act: Law, Policy,

and Perspective (Donald C. Baur et al. eds.,

2002)... ais aoe is 16

U2. Dept of Interior, Recovery Plan for the

Mexican Spotted Owl (Strix occidentalis

lucida) (1995) ............ Nay SAA ecvccedt. @. 4. 35

Webster’s New Collegiate Dictionary (1979) . 13

PETITION FOR WRIT OF CERTIORARI

The Arizona Cattle Growers’ Association (““ACGA”)

hereby petitions for a writ of certiorari to review the

judgment of the United States Court of Appeals for

the Ninth Circuit in this case.

CITATIONS OF REPORTS OF

OPINIONS ENTERED IN THE CASE

The opinion of the Ninth Circuit, reproduced in

the appendix (“App.”) at 1-34, is reported at 606 F.3d

1160. The opinion and order of the district court,

App. 35-81, is reported at 534 F. Supp. 2d 1013.

BASIS FOR SUPREME COURT JURISDICTION

The Ninth Circuit entered its judgment on June

4, 2010. App. 1. On July 30, 2010, Justice Kennedy

extended the time period within which to file a

petition for a writ of certiorari to and including

October 1, 2010. The present petition is timely filed

under 28 U.S.C. § 2101(c) and under Rule 13.3 of this

Court. The jurisdiction of this Court is invoked under

28 U.S.C. § 1254(1).

The ACGA is a trade association whose members

consist of ranchers and various associate members

in the ranching industry. The ACGA has members

in the ranching business throughout Arizona, many

of whom hold grazing permits authorizing livestock

grazing on federal lands designated as critical habitat

for the Mexican spotted owl.

—_—___—_— @ —_____- sv

STATUTORY PROVISIONS

INVOLVED IN THE CASE

The case involves various provisions of the

Endangered Species Act and its implementing

regulations, which are reproduced at App. 339-346.

ze amine

STATEMENT OF THE CASE

I. OVERVIEW OF THE CASE

This case concerns’ the requirements for

designating land as critical habitat under’ the

Endangered Species Act (“ESA”), 16 U.S.C. § 1531

et seq. Once designated, critical habitat restricts

land uses through the application of ESA § 7(a)(2),

16 U.S.C. § 1536(a)(2). Federal actions that) would

destroy or adversely modify a listed species’ critical

habitat are prohibited, unless a special exemption is

tranted under 16 U.S.C. § 1536(h). To balance the

interests of land and resource users with the interests

of wildlife protection, Congress has required the Fish

and Wildlife Service (““FWS”) to consider the economic

costs and other impacts produced by the designation

of critical habitat, and has authorized IWS to exclude

areas from critical habitat based on those impacts

as long as exclusion will not result in the species’

see also 5O C.FE.R.

extinction. 16 U.S.C. § 1533(b)(2):

§ 424.19.

In this case, FWS designated more than 8.6

million acres of federal land in four states as critical

habitat for the Mexican spotted owl. Final

Designation of Critical Habitat for the Mexican

Spotted Owl, 69 Fed. Reg. 53182 (Aug. 31, 2004)

(“2004 Critical Habitat Rule”) (codified at 50 C.FE_R.

§ 17.95(b)) (App. 82-338). As a result, activities

occurring on this land are now subject to the

requirements imposed by ESA’ § 7(a)(2). FWS,

however, determined that no economic costs would be

imposed on land or resource users. App. 307-311.

KF WS obtained this anomalous result by using the

“baseline” approach, under which the = agency

considers only the incremental economic costs above

the existing regulatory baseline. The regulatory

baseline includes all costs that are related to the

species’ listing as endangered or threatened

Consequently, few, if any, economic impacts are

attributed to the designation of critical habitat under

the baseline approach, even when millions of acres of

land are designated, as this case illustrates. This

means that there are no regulatory benefits from

excluding areas from critical habitat, making the

analysis mandated by § 4(b)(2) meaningless. For

these reasons, the Tenth Circuit rejected the baseline

approach as contrary to the ESA. N.M. Cattle

Growers Ass'n v. U.S. Fish and Wildlife Serv., 248

F.3d 1277, 1285 (10th Cir. 2001). The Ninth Circuit

rejected the Tenth Circuit’s holding and approved the

baseline approach, creating a direct conflict between

P} g

these circuits.

The Ninth Circuit also upheld FWS’s

determination that all 8.6 million acres of critical

habitat are occupied by owls’ by’ improperly

substituting its own rationale for that of the agency

and speculating that large numbers of undiscovered

owls exist, requiring millions of acres of critical

habitat. See, e.g., Motor Vehicle Mfrs. Ass’n v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 50 (1983)

(“|AJn agency’s action must be upheld, if at all, on the

basis articulated by the agency itself.”). In so doing,

the court violated the requirement that critical

habitat be designated based on the best scientific

data available, and not on speculation or surmise -

an additional requirement imposed by Congress to

protect the interests of land and resource users. See

Bennett v. Spear, 520 U.S. 154, 176-77 (1997).

ll. THE ADMINISTRATIVE PROCEEDINGS

CONCERNING THE CRITICAL HABITAT

DESIGNATION

A. Background on the Mexican Spotted

Owl

The Mexican spotted owl was listed as a

threatened species under the ESA in 1993. Final Rule

to List the Mexican Spotted Owl as Threatened

Species, 58 Fed. Reg. 14248 (Mar. 16, 1993) (“Listing

Rule”) (codified at 50 C.F.R. § 17.11(h)). The owl’s

range extends from the southern Rocky Mountains in

Colorado and the Colorado Plateau in southern Utah

through Arizona, New Mexico and west Texas to the

southern end of the Mexican Plateau in central

Mexico. Listing Rule, 58 Fed. Reg. at 14248-49. Within

this geographic area, the owl occupies “disjunct

localities that correspond to isolated mountain systems

and canyons.” App. 89; see also App. 383-385, 419.

The primary basis for listing the owl was the

modification of suitable habitat resulting from timber

harvesting on National Forests in Arizona and New

Mexico and the threat of catastrophic wildfires. Listing

Rule, 58 Fed. Reg. at 14266-70.

Since its listing, the Mexican spotted owl

population in the United States has hovered around

2,000 birds. In the Listing Rule, FWS estimated that

the owl population in the United States totaled 2,160

birds in 1990. Jd. at 14249. In its 1995 recovery

plan, FWS stated that although it lacked data on the

owl’s population, the species appeared to be stable

and well distributed throughout its historic range.

See U.S. Dept of Interior, Recovery Plan for the

Mexican Spotted Owl (Strix occidentalis lucida) 11-12

(1995) (“Recovery Plan”); App. 383-385." In its 2004

Critical Habitat Rule, FWS stated that the owl’s

population size and distribution are similar to the

species’ historic population. App. 93. The agency also

stated that the total number of known owls on federal

“The Recovery Plan is available at http://www.fws.gov,

southwest/es/arizona/MSO. htm (visited September 24, 2010)

Excerpts are reproduced in the appendix

land in the southwestern United States ranges from

1,176 to 2,352 birds. App. 94.

B. Prior Attempts to Designate Critical

Habitat

When it listed the owl in 1993, FWS failed to

designate critical habitat, stating that critical habitat

was not determinable because “maps in sufficient

detail to accurately delineate areas on the ground are

not presently available.” Listing Rule, 58 Fed. Reg. at

14270. Two years later, FWS_ published a _ rule

designating over 4.6 million acres of land in Arizona,

Colorado, New Mexico, and Utah as critical habitat.

Determination of Critical Habitat for the Mexican

Spotted Owl, 60 Fed. Reg. 29914 (June 6, 1995). At

that time, FWS estimated that the United States

contained about 7.3 million acres of suitable owl

habitat, but acknowledged that this estimate was

likely overstated. 7d. at 29917. The 1995 designation

was challenged on the ground that FWS failed to

comply with the National Environmental Policy Act

(NEPA), 42 U.S.C. § 4321 ef seg., and was revoked.

Revocation of Critical Habitat for the Mexican Spotted

Owl, Loach Minnow, and Spikedace, 63 Fed. Reg.

14378 (Mar. 25, 1998).’

" The circuit courts also are split on whether FWS must

comply with NEPA in designating critical habitat. The Tenth

Circuit has held that NEPA applies to the designation of critical

habitat. Catron County Bd. of Comm'rs v. U.S. Fish and Wildlife

Serv., 75 F3d 1429 (10th Cir. 1996). The Ninth Circuit, in

(Continued on following page)

FWS issued a new critical habitat rule in

February 2001, designating 4.6 million acres of land

in Arizona, Colorado, New Mexico, and Utah. Final

Designation of Critical Habitat for the Mexican

Spotted Owl, 66 Fed. Reg. 8530 (Feb. 1, 2001).

Environmentalists challenged the new designation,

asserting that the exclusion of a substantial portion

of the National Forest land initially proposed as

critical habitat was arbitrary and capricious. The

district court agreed, vacated the 2001 rule, and

ordered FWS to publish a new critical habitat

designation. Ctr. for Biological Diversity v. Norton,

240 F. Supp. 2d 1090, 1109 (D. Ariz. 2003).

C. The 2004 Critical Habitat Rule

In response to the district court’s order, and

instead of publishing a new proposed rule for public

review and comment (see 16 U.S.C. § 1533(b)(5)A)),

FWS issued a notice announcing that it had reopened

the comment period on the agency’s 2000 proposed

rule and, ultimately, issued a new critical habitat

designation in 2004. App. 97-98. This time, FWS

designated as critical habitat more than 8.6 million

acres of federal land in Arizona, Colorado, New

Mexico, and Utah. App. 238. In Arizona alone,

nearly 4 million acres of land were designated,

including more than 3.2 million acres of National

Forest land.

contrast, has held that NEPA does not apply. Douglas County v

Babbitt, 48 F.3d 1495 (9th Cir. 1995).

The starting point for FWS’s designation was the

protected activity centers or “PACs,” which are

established around each known owl nest on federal

land. Each PAC contains a minimum of 600 acres and

includes the best owl nesting and roosting habitat

in the area. App. 88. A total of 1,176 Mexican

spotted owl PACs has been identified on federal land.

App. 93-94. FWS noted the existence of some

non-territorial birds (called “floaters”) as well as

dispersing juvenile owls. App. 218-219. But the

agency did not provide any estimate of the number of

owls outside PACs or state that large numbers of

non-territorial owls likely exist. Instead, the agency

explained that Mexican spotted owls are not

migratory and exhibit high site fidelity. App. 222,

223, 226.

While the PACs include known nest and roost

sites and the bulk of the associated foraging territory,

they make up only a small percentage of the total!

land designated as critical habitat. For example, FWS

stated in its environmental assessment that the

National Forests of Arizona and New Mexico contain

987 PACs that cover 643,396 acres (about 651 acres

per PAC) and an additional 5.4 million acres of

“suitable” owl habitat. App. 425. Nearly 5.3 million

acres of this land were designated as critical habitat —

almost 60 percent of the total designation. App. 238.

Thus, most of the land designated as critical habitat

in Arizona and New Mexico National Forests is

“suitable” habitat outside an owl PAC.

The reason for the large discrepancy between the

area within the PACs and the total area designated

as critical habitat is that FWS also relied on

guidelines provided in the Recovery Plan to identify

potential owl habitat, which was then designated as

critical habitat. App. 87-88, 100, 233-234, 333-334."

The Recovery Pian generally describes three types of

land, protected areas, restricted areas, and other

forest and woodland types, and recommends varying

levels of protection for each type. App. 88-89, 395-414.

Protected areas include owl PACs, areas containing

slopes greater than 40 percent in mixed-conifer

and pine-oak forests that have not been logged within

the past 20 years, and certain administratively

reserved lands such as federal wilderness areas.

App. 88, 100, 396-397, 402, 404-406. FWS explained

that protected areas are “areas where owls are

known to occur or are likely to occur.” App. 100.

In contrast, restricted areas do not qualify as

protected areas, but instead contain “mixed-conifer

forest, pine-oak forest, and riparian areas where

potential nesting and roosting habitat exist.” App. 88

“ Recovery plans are guidance documents that impose no

obligations on any agency, entity, or person to implement the

various tasks listed in the plan. See Fund for Animals v. Rice, 85

F.3d 535, 547-48 (11th Cir. 1996). FWS is not required to follow

the same rulemaking procedures and make the same findings

required for designating critical habitat. Compare 16 U.S.C.

§ 1533(f) with 16 U.S.C. § 1533(aX3), (b)(2), (b)4) & (b)(5). In

contrast to critical habitat, recovery plans do not specifically

identify habitat areas, but instead describe recommended

management actions.

(emphasis added); see also App. 406-407 (discussion

of “restricted areas” in the Recovery Plan).

In determining whether all 8.6 million acres are

occupied by owls, however, FWS did not distinguish

between PACs with recent occupancy records, other

protected areas, and restricted areas with potential

owl habitat. The agency instead stated that all of

these areas are occupied because they are “within the

geographic area occupied by the species” and “devised

around known owl nest sites.” App. 121, 135, 233.

FWS also stated that it “consider|ed] protected areas

to be occupied on a more permanent basis and

restricted areas to be temporally occupied.” App. 121.

FWS did not explain what “temporally occupied”

means, nor did the agency provide a definition of

“occupied” habitat.

In analyzing economic and other impacts under

§ 4(b)(2), FWS used the baseline approach, explaining

that “[t]he economic effects already in place due to

the listing of the owl as threatened is the baseline

upon which we analyzed the economic effects of the

designation of critical habitat.” App. 308. FWS

concluded that the only “[{i]mpacts associated solely

with this rulemaking” would be some additional

administrative costs, which were estimated to be

about 25 percent of $72,000 to $238,000 annually

App. 309 (emphasis added), 310-311. According to

FWS, livestock grazing, timber harvesting, mining,

oil and gas development, and other private land and

resource uses occurring within critical habitat would

not be affected by the designation

Il THE COURT PROCEEDINGS BELOW

A. The District Court’s Decision

The ACGA filed suit in the District of Arizona,

alleging that FWS violated the ESA and the

Administrative Procedure Act (“APA”), 5 U.S.C. § 551

et seq., in issuing the 2004 Critical Habitat Rule.

Among other things, the ACGA alleged that FWS had

designated unoccupied areas as critical habitat

without making the specific findings required by

16 U.S.C. § 1532(5)(A)Gi) and 50 C.F.R. § 424.12(e).

The ACGA further alleged that FWS violated

16 U.S.C. § 1533(b)(2) by failing to analyze all of the

economic impacts of the critical habitat designation

and concluding that the designation would not impact

any land and resource users.

The district court entered an order granting

summary judgment against the ACGA on all claims.

App. 81. The court upheld FWS’s analysis of the

economic impacts of designating the owl’s critical

habitat. App. 70-80. It narrowly interpreted ESA

§$ 4(b)(2), and held that, as a matter of law, FWS is

prohibited from considering impacts that may be

related to the species’ listing. App. 77-79. The court

rejected the Tenth Circuit’s holding in New Mexico

Cattle Growers, concluding that the Ninth Circuit’s

decision in Gifford Pinchot Task Force v. U.S. Fish

and Wildlife Serv., 378 F.3d 1059 (9th Cir. 2004),

eliminated the basis for the Tenth Circuit’s ruling.

App. 75-76.

On the challenge to FWS’s designation of

unoccupied areas, the district court found the word

“occupied” as used in the definition of critical habitat

to be ambiguous, and applying Chevron U.S.A., Inc. v.

NRDC, 467 U.S. 837 (1984), accepted FWS’s

interpretation as reasonable. App. 60-66.

Unfortunately, the district court misapprehended the

agencys rule, stating that FWS “interpreted

‘occupied’ to include those ‘areas where owls are

known to occur or are likely to occur,” and then

assuming that owls are likely to occur throughout all

8.6 million acres of critical habitat. App. 63-64

(citing 2004 Critical Habitat Rule, 69 Fed. Reg. at

53185). However, FWS actually stated that protected

areas ~ which are only a small subset of the critical

habitat — are “areas where owls are known to occur or

are likely to occur.” App. 100. Based on this error,

the court found that the agency’s occupancy

determination was supported by the best available

science. App. 64-66.

B. The Ninth Circuit’s Opinion

The ACGA appealed from the district court’s

judgment. On appeal, the Ninth Circuit affirmed the

district court, holding that FWS’s analysis of

economic impacts’ resulting from the _ critical

designation was not arbitrary and _ capricious.

App. 27-33. The court approved use of the baseline

approach for evaluating economic impacts and

rejected New Mexico Cattle Growers, concluding that

the Tenth Circuit had relied on a “faulty premise”

regarding the regulatory impact of critical habitat

and that the baseline approach is “more logical.”

App. 29-31. Like the district court, the Ninth Circuit

relied on Gifford Pinchot to support its rejection of

the Tenth Circuit’s holding. App. 29-30.

The ACGA argued on appeal that the term

“occupied” is not ambiguous and has no specialized

or unique meaning. Instead, the plain meaning of

“occupied” is to “reside in,” U.e., occupied areas must

actually contain members of the species. See, e.g.,

Webster’s New Collegiate Dictionary 787 (1979).

The Ninth Circuit held that “occupied” “does not

provide a clear standard,” and rejected the ACGA’s

argument on the basis that “reside in” is too narrow.

App. 12-14. Because FWS provided no definition of

“occupied” in the rule, the Ninth Circuit relied on

F'WS’s Consultation Handbook, which defines “occupied

critical habitat” for the purpose of § 7 consultation as

“critical habitat that contains individuals of the

species at the time of the ... project analysis. A species

does not have to occupy critical habitat throughout

the year for the habitat to be considered occupied.”

App. 11 (emphasis added). Following that definition,

the court held that “FWS has authority to designate

as ‘occupied’ areas that the owl uses with sufficient

regularity that it is likely to be present during any

reasonable span of time.” App. 12.

Based on its interpretation of “occupied,” the Ninth

Circuit held that FWS did not designate any

unoccupied areas as critical habitat. App. 16-19. The

court determined that owls utilize far more territory

than the area within a PAC and that there are

actually a much larger number of owls, providing

adequate support for FWS’s occupancy determination.

App. 16-25. The court gave no weight to FWS’s

estimate of the number of owls occupying federal land

in the southwest, emphasizing that the PACs “reflect

only known owl sites.” App. 18, 25 (emphasis

original). Rather the court found that “there is record

support for the existence of substantially greater

numbers of owls and undiscovered sites,” as well as

“areas used by nonterritorial owls, areas used for

juvenile dispersal, or areas used for owl migration.”

App. 25.

REASONS FOR GRANTING THE PETITION

The Ninth Circuit’s opinion effectively rewrites

the ESA. It changes the method used to analyze the

economic impacts of designating critical habitat in a

way that renders the analysis meaningless, and blurs

the distinction between “occupied” and “unoccupied”

areas that appears on the face of the statute and in

FWS’s regulations

If left undisturbed, the Ninth Circuit’s opinion

will have far-reaching consequences. It upsets the

national uniformity in the administration of the ESA

by creating a square conflict with the Tenth Circuit.

This conflict is particularly problematic given that

endangered species and their critical habitat may

be found in multiple states and cross circuit court

boundaries, as this case illustrates. Further, by

marginalizing the role that economics plays in

designating critical habitat and allowing large

expanses of land to be treated as “occupied” without

credible scientific evidence that the species’ members

are actually present, the decision upsets the balance

between land and _ resource users and_ wildlife

protection intended by Congress.

The opinion also warrants review because it

contravenes’ well-established administrative law

principles and principles of statutory interpretation.

Although critical habitat must be based on the best

scientific information available, the Ninth Circuit

engaged in_- result-driven decision-making by

substituting its own reasoning for that of the agency,

and then engaged in impermissible speculation about

the number of Mexican spotted owls in the

southwestern United States and how much land is

truly critical to the species.

This Court should grant the petition and resolve

the questions created by the Ninth Cuircuit’s

erroneous construction of the ESA and _ restore

Congress’s intent that economics play a central role

in the designation of critical habitat and that land

“occupied” by a species be construed narrowly and

limit the scope of critical habitat.

I. THIS CASE PRESENTS IMPORTANT

LEGAL QUESTIONS CONCERNING THE

ROLE OF CRITICAL HABITAT UNDER

THE ENDANGERED SPECIES ACT

Since its enactment in 1973, the ESA has evolved

into one of the nation’s most demanding environmental

laws. As one commentator stated, “The ESA is not the

single most important federal environmental statute,

but — whether one applauds or deplores this turn of

events — the law is now a primary obstacle to land

development and related activities in America.”

George Cameron Coggins, “A Premature Evaluation

of American Endangered’ Species Law,” in

Endangered Species Act: Law, Policy, and Perspective

1 (Donald C. Baur et al. eds., 2002). Critica! habitat is

an important component of the ESA’s regulatory

scheme. This case concerns the role of critical habitat

under the ESA and the balancing of interests

intended by Congress when critical habitat is

designated through the consideration of economic

impacts and the use of the best scientific data

available under § 4(b)(2).

FWS is required to designate critical habitat at

the same time a species is listed as threatened or

endangered “to the maximum extent prudent and

determinable.” 16 U.S.C. § 1533(a)(3)(A); 50 C.E.R.

§ 424.12(a). Following its designation, critical habitat

restricts land and resource uses through the

application of ESA § 7(a)(2), 16 U.S.C. § 1536(a)(2).

See Natl Ass’n of Home Builders v. Defenders of

Wildlife, 551 U.S. 644, 651-52 (2007). For example,

the presence of critical habitat for the snail darter

was the basis for the injunction that prevented the

Tellico Dam’s completion in Tennessee Valley

Authority v. Hill, 437 U.S. 153, 161-62, 171 (1978).

Moreover, if a proposed action may adversely affect a

species’ critical habitat, the agency must engage in

consultation with FWS to ensure that critical habitat

is not adversely modified. See 50 C.F.R. § 402.14. This

process may result in_ restrictions or other

modifications to the proposed action to avoid adverse

modification. Id. § 402.14(h); see also Bennett, 520

U.S. at 158, 169-70 (discussing the restrictions

resulting from § 7 consultation).

The term “action” has been defined broadly as

“all activities or programs of any kind authorized,

funded, or carried out, in whole or in part, by Federal

agencies,” and includes “the granting of licenses,

contracts, leases, easements, rights-of-way, permits,

[and] grants-in-aid.” 50 C.F.R. § 402.02. Thus, almost

any discretionary federal action potentially triggers

the requirements imposed by § 7(a)(2). As various

federal regulatory programs have expanded, an

increasing number of private land uses require some

sort of federal permit or have some other federal!

nexus that triggers the application of § 7(a)(2). See,

e.g., Rapanos v. United States, 547 U.S. 715, 724-29

(2006) (plurality opinion) (describing the expansion of

jurisdiction asserted by the Corps of Engineers under

the Clean Water Act).

In addition, private activities that take place on

federal land such as livestock grazing, timber

harvesting, mining, and oi] and gas development

necessarily involve some type of federal authorization

and are affected by the designation of critica) habitat.

This is especially problematic in the western states

(including states in the Ninth and Tenth Circuits),

which contain millions of acres of federal land and

whose economies depend on the ability to access and

use federal land.” Many of the ACGA’s members, for

example, depend on federal land for their ranching

operations and hold grazing permits from the Forest

Service or the Bureau of Land Management.

Finally, the requirements of § 7(a)(2) apply only

to species’ habitat that is formally designated as

“critical” under ESA § 4. See Ariz. Cattle Growers’

Ass'n v. U.S. Fish and Wildlife Serv., 273 F.3d 1229,

1244 (9th Cir. 2001) (‘[TJhere is no evidence that

Congress intended to allow [FWS] to regulate any

parcel of land that is merely capable of supporting a

protected species.”). Federally authorized or funded

activities taking place in areas that are not occupied

by members of a listed species normally will not be

subject to § 7(a)(2) unless critical habitat is present.

See, e.g., Defenders of Wildlife v. Flowers, 414 F.3d

1066, 1069-70 (9th Cir. 2005) (the Corps of Engineers

had no obligation to consult with FWS when no listed

species occupied the project area and no critical

habitat was present). Consequently, the designation

of critical habitat expands the activities potentially

subject to § 7(aX2) by subjecting land uses with a

federal nexus to the “adverse modification” standard

regardless of whether members of the species are

found in the project area.

° More than 60% of the land in Arizona — over 45 million

acres — is in some form of federal ownership or control. See

Arizona Statistical Abstract 2003: Data Handbook (Pia Montoya

ed.) 198-99 (2003).

Because of the regulatory burdens imposed by

critical habitat, when the ESA was amended in 1978

to create greater flexibility and reduce resource

conflicts, Congress specifically addressed critical

habitat. It enacted a definition of critical habitat that

distinguishes between occupied and _ unoccupied

areas, required that critical habitat designations be

based on the best scientific data available, and

required that economic impacts be considered.

Unfortunately, in this case, the Ninth Circuit has

undermined the role that economic considerations

should play when critical habitat is designated, and

based on its own speculation upheld the designation

of millions of acres of land in four western states with

no verified record of occupancy.

Il. THE COURT SHOULD RESOLVE THE

CONFLICT BETWEEN THE NINTH AND

TENTH CIRCUIT COURTS OF APPEALS

REGARDING THE REQUIREMENTS

IMPOSED BY ESA 8§ 4(b)(2)

A. Statutory and Regulatory Background

In 1978, Congress amended the ESA to authorize

IWS to exclude areas from critical habitat based on

economic considerations. Endangered Species Act

Amendments of 1978, Pub. L. No. 95-632, § 12(7),

92 Stat. 3751, 3766 (1978) (current version at

16 U.S.C. § 1533(b)(2)) (App. 341-342). This statute

requires FWS to evaluate and consider the economic

costs associated with designating areas as critical

habitat and, based on those costs, authorizes the

exclusion of areas that satisfy the definition of critical

habitat, subject only to the limitation that an area’s

exclusion may not result in the species’ extinction.

Congress explained that this provision was added

to provide greater flexibility in designating critical

habitat and to reduce conflicts between critical

habitat and land use activities by requiring

economics and other non-biological factors to be

considered. See H.R. Rep. No. 95-1625, at 7-10, 16-17

(1978), reprinted in 1978 U.S.C.C.A.N. 9453, 9457-60,

9466-677 (App. 348-354). In amending the ESA in

1982, Congress again emphasized that economic

impacts should play an important role in critical

habitat designation, explaining that the consideration

of economic impacts under § 4(b)(2) provides a

“counter-point to the listing of species without due

consideration for the effects on land use and other

development interests.” H.R. Rep. No. 97-567, at 12

(1982), reprinted in 1982 U.S.C.C.A.N. 2807, 2812

(App. 375-376).

In 1984, FWS adopted new rules governing the

listing of species and the designation of critical

habitat, which are codified at 50 C.F.R. part 424. See

Listing Endangered and Threatened and Designating

Critical Habitat; Amended Procedures to Comply with

the 1982 Amendments to the Endangered Species Act,

49 Fed. Reg. 38900 (Oct. 1, 1984). These rules require

FWS to “identify any significant activities that would

either affect an area considered for designation of

critical habitat or be likely to be affected by the

designation,” and to “consider the probable economic

and other impacts of the designation upon proposed

or ongoing activities.” 50 C.FLR. § 424.19. In its

rulemaking preamble, FWS stated that this analysis

should focus “primarily on the economic. costs

associated with designation, which was the intent of

Congress in requiring such analyses,” and not on the

biological impacts of critical habitat, which “are more

properly addressed in_ determining whether

designation is prudent and will be of benefit to a

species.” 49 Fed. Reg. at 38907; see also 50 C.F.R.

§ 424.12(a)(1) (criteria for determining when the

designation of critical habitat is not prudent).

B. The “Baseline” Approach and the Tenth

Circuit’s Decision in New Mexico Cattle

Growers

In New Mexico Cattle Growers, the Tenth Circuit

addressed the economic analysis mandated by ESA

§ 4(b)(2), concluding that all economic impacts of

critical habitat must be considered, regardless of

whether the impacts may be attributable to the

species’ listing. 248 F.3d at 1284-85. At issue was

FWS’s_ critical habitat designation for’ the

southwestern willow flycatcher, which included 600

miles of rivers and streams in Arizona, California and

New Mexico. Final Determination of Critical Habitat

for the Southwestern Willow Flycatcher, 62 Fed. Reg.

39129, 39137, 39139-46 (July 22, 1997). As in this

case, the designation included both areas with recent

nest sites (areas with occupancy records) and areas

with the potential to support nest sites in the future.

Id. at 39133.

FWS concluded that no economic impacts would

result from the designation, reasoning that critical

habitat would not cause any “incremental” impacts on

land and water uses beyond those already caused by

the species’ listing. In other words, the impacts

attributable to the flycatcher’s listing were regarded

as “the baseline upon which critical habitat is

imposed.” Jd. at 39137-38. The agency’s reasoning

was based on the similar definitions of “jeopardize the

continued existence of” and “destruction or adverse

modification” in the regulations governing §7

consultation. Jd. at 39131; see 50 C.F.R § 402.02

(definitions). Both definitions rely on “an appreciable

detrimental effect on both survival and recovery of

the species” to determine when a proposed action

would violate § 7(a)(2). Jd. FWS explained that due to

this similarity, in the context of §7 consultation

“actions satisfying the standard for adverse

modification are nearly always found to also

jeopardize the species concerned.” /d.

The Tenth Circuit squarely rejected this

reasoning, holding that FWS’s “baseline” approach

renders the consideration of economic impacts

required by Section 4(b)(2) “virtually meaningless”

and is “not in accord with the language or intent of

the ESA.” N.M. Cattle Growers, 248 F.3d at 1285. The

Tenth Circuit explained that “Congress intended that

the FWS conduct a full analysis of all of the economic

impacts of a critical habitat designation, regardless of

whether those impacts are attributable co-extensively

to other causes,” including the species’ listing. Jd. For

support, the court relied on its decision in Catron

County, which held that the designation of critical

habitat causes impacts to the human environment,

triggering the application of NEPA. Jd. at 1284

(discussing Catron County, 75 F.3d at 1437).

C. Gifford Pinchot and Subsequent Cases

Rejecting New Mexico Cattle Growers

After New Mexico Cattle Growers was issued, the

courts and FWS began to discard the baseline

approach as contrary to the ESA. See, e.g., Home

Builders Ass’n of N. Cal. v. U.S. Fish and Wildlife

Serv., 268 F. Supp. 2d 1197, 1225-30 (E.D. Cal. 2003)

(vacating the designation of 400,000 acres of land as

critical habitat for the Alameda whipsnake); Home

Builders Ass’n of N. Cal. v. Norton, 293 F. Supp. 2d 1

(D.D.C. 2002) (vacating the designation of 4.1 million

acres of land as critical habitat for the red-legged

frog). In these cases and others, FWS conceded that

its analysis of economic impacts was inadequate

based on New Mexico Cattle Growers.

In 2004, the Ninth Circuit issued its opinion in

Gifford Pinchot, holding that FWS’s rule defining

“destruction or adverse modification” was too narrow

because the definition “explicitly requires appreciable

diminishment of the critical habitat necessary for

survival” before the adverse modification standard

would be triggered. 378 F.3d at 1069-71. As a result,

the court invalidated several biological opinions

concerning timber harvesting in National Forests on

the ground that FWS failed to consider whether

adequate critical habitat would remain to ensure

recovery of the northern spotted owl. Jd. at 1071-72.

Although Gifford Pinchot involved a challenge

to biological opinions issued under ESA §7, and

therefore did not address the requirements of

§ 4(b)(2) or the designation of critical habitat

generally, several district courts subsequently have

held that Gifford Pinchot undermined the Tenth

Circuit’s reasoning. Notably, the first court to do so

was in the District of Columbia Circuit. Cape

Hatteras Access Pres. All. v. Dep't of IJnterior,

344 F. Supp. 2d 108, 126-32 (D.D.C. 2004) (approving

the baseline approach and rejecting N.M. Cattle

Growers); see also Ctr. for Biological Diversity v. BLM,

422 F.Supp. 2d 1115, 1151-53 (N.D. Cal. 2006)

(hoiding that FWS improperly considered

co-extensive project modification costs in analyzing

the impact of designating critical habitat and

rejecting New Mexico Cattle Growers).

The district court in this case relied on the

foregoing decisions to reject New Mexico Cattle

Growers and hold that FWS is prohibited from

considering impacts that may be co-extensive with

the impacts from the species’ listing under § 4(b)(2).

App. 76-80. On appeal, the Ninth Circuit approved

the baseline approach and affirmed FWS’s

determination that the only economic impact

resulting from designating 8.6 million acres of federal

land as critical habitat would be a small amount of

administrative costs incurred by federal agencies.

App. 27-33. Relying on Gifford Pinchot, the Ninth

Circuit rejected New Mexico Cattle Growers,

concluding that the Tenth Circuit had relied on a

“faulty premise” regarding the regulatory impact of

critical habitat, and that the baseline approach is

“more logical.” App. 30-31.

Even more recently, the Ninth Circuit approved

the baseline approach in rejecting a challenge to the

designation of 850,000 acres of land in California and

southern Oregon as critical habitat for a group of

“vernal pool” species, relying on its opinion in this

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

Wildlife Serv., __. F.3d ___, 2010 U.S. App. LEXIS

16439 at *23-*26 (9th Cir. Aug. 9, 2010).

D. The Ninth Circuit’s Opinion Should Be

Reversed

At present, the baseline approach is valid in the

Ninth Circuit, allowing FWS to ignore all economic

costs related to designating critical habitat that are

considered co-extensive with the species’ listing. The

Tenth Circuit, however, has not overruled or modified

New Mexico Cattle Growers, and it remains the law in

that circuit. By itself, this situation results in legal

uncertainty when a species is found in multiple

circuits, as is the case with the Mexican spotted owl

and southwestern willow flycatcher. Indeed, if this

case had been brought by a different party in a

different state, New Mexico Cattle Growers would

have been controlling precedent, and the result would

have been different.

Moreover, listed species are found throughout the

United States, and despite the requirement that

critical habitat be designated concurrently with a

species listing, see 16 U.S.C. §1533(aX3)(A), a

majority of species do not have critical habitat

designated.” Consequently, the conflict between the

Ninth and Tenth Circuits is certain to result in more

confusion as additional species are listed and more

critical habitat is designated.

Equally troubling is the likelihood that the Ninth

Circuit’s position on the analysis mandated by

§ 4(a)(2) will be adopted by other circuits simply

because it is the most recent judicial pronouncement

on the issue. In fact, the Ninth Circuit’s opinion is

erroneous for several reasons, and should be reversed

by the Court before this conflict spreads to other

circuits.

1. The Ninth Circuit misread New Mexico Cattle

Growers. The Tenth Circuit discussed but did not rely

on the similar definitions of “jeopardize the continued

existence of,” which applies to the species, and

“destruction or adverse modification” of critical

habitat in FWS’s §7. consultation rules in

condemning the baseline approach. The court

explained:

* According to FWS’s website, there are 1,371 species of

wildlife, fish and plants listed as threatened or endangered in

the United States, but only 596 of those species has critical

habitat. See http://www.fws.gov/endangered/species/ (visited

September 15, 2010).

But the question of whether the impacts of

listing and a CHD (eritical habitat

designation] are co-extensive is not the

precise question before us. Rather the

question is whether the FWS must analyze

all of the economic impacts of critical habitat

designation (regardless of whether the

impacts are co-extensive with other causes),

or only those impacts that are a “but for”

result of the CHD.

N.M. Cattle Growers, 248 F.3d at 1284. The Tenth

Circuit decided the issue based on the plain language

of ESA § 4(b)(2), holding that the baseline approach

conflicts with the language and intent of the statute.

Id. at 1285. The ESA’s language is clear: FWS must

take into consideration the economic and other

impacts of designating particular areas as criticr!

habitat. 16 U.S.C. § 1533(b)(2). It is not qualified, «or

example, by a statement that impacts that might also

result from a species’ listing (or from some other

factor) may be disregarded by the agency, which is

precisely what occurs under the baseline approach.

2. Regardless of the approach used to analyze

the economic impacts under § 4(b)(2), if the bulk of

the land designated as critical habitat is not occupied

by members of the species, the designation of critical

habitat imposes significant regulatory burdens. As

explained, § 7(a)(2) does not apply if no members of a

species and no critical habitat are present in the

project area. See, e.g., Defenders of Wildlife, 414 F.3d

at 1069-70; Ariz. Cattle Growers’, 273 F.3d at 1244.

Thus, in unoccupied areas, any regulatory burdens

imposed by § 7(a)(2) result solely from the critical

habitat designation.

Under the baseline approach, however, all 8.6

million acres of critical habitat for the owl were not

only treated as being currently occupied, but as being

occupied forever. For example, if a rancher’s grazing

allotment is currently occupied by an owl, the

baseline approach assumes that the allotment will

always be occupied, triggering § 7 consultation when

his grazing permit is renewed a decade from now.

Such assumption defies logic. Once an area has been

designated as_ critical habitat, any future

discretionary federal action that modifies the habitat

triggers § 7, regardless of whether members of the

species are present, imposing a regulatory burden on

land users. The baseline approach ignores this

impact.

3. It is axiomatic that “‘a reviewing court

should not confine itself to examining a particular

statutory provision in isolation.” Nat’l Ass’n of Home

Builders, 551 U.S. at 666 (quoting FDA v. Brown &

Williamson Tobacco Corp., 529 U.S. 120, 132 (2000)).

The Ninth Circuit violated this principle’ by

disregarding the deadline for critical habitat

designations. The ESA requires that, “to the

maximum extent prudent and determinable,” FWS

designate critical habitat concurrently with the listing

decision. 16 U.S.C. § 1533(a)(3)(A); see also 50 C.FER.

§ 424.17(b). If critical habitat is not then

determinable, FWS must complete the designation

within one year. 16 U.S.C. § 1533(b)(6)(C); 50 C.E.R.

§ 424.17(b)(2). Unless critical habitat is not prudent,

the ESA affords no other exceptions or delays.

16 U.S.C. § 1533(a)(3); see also NRDC v. U.S. Dep't

of the Interior, 113 F.3d 1121, 1127 (9th Cir. 1997)

(FWS “failed to discharge its statutory obligation to

designate critical habitat when it listed the [species],

or to articulate a rational basis for invoking the rare

o 4 ”

imprudence exception.”).

If FWS complies with the law, there is no

regulatory baseline against which the economic

impacts of designating critical habitat can be

compared. In that case, the economic analysis is

situated precisely where Congress intended:

concurrent with listing and serving as a counter-point

to listing based solely on biology. Consequently, the

baseline approach — which assumes that there is a

pre-existing regulatory baseline — conflicts with the

statutory scheme established by Congress. The Ninth

Circuit dismissed this point, stating that “listing the

species 1S a necessary antecedent to designating

critical habitat.” App. 32. But the statute and

FWS’s rules expressly require critical habitat to

be designated “concurrently” with the listing, not

“subsequently.” See 16 U.S.C. § 1533(a)(3)(A)(i);

50 C.E.R. §§ 424.12, 424.17(b).

4, The Ninth Circuit also misapphed Gifford

Pinchot. As explained, in Gifford Pinchot, the court

did not address the requirements imposed by ESA § 4

for the designation of critical habitat. The case

instead involved a challenge to biological opinions

issued under § 7. As a result, the reasoning of Gifford

Pinchot is inapplicable to, and should not control how

critical habitat is designated.’

Moreover, FWS did not rely on Gifford Pinchot to

justify its use of the baseline method. FWS instead

stated that it was “reviewing [Gifford Pinchot] to

determine what effect it may have on the outcome of

consultations pursuant to Section 7 of the Act.”

App. 85. The agency also took the position, as it did

in designating critical habitat for the southwestern

willow flycatcher, that critical habitat provides little

benefit to species and is a waste of agency time and

resources. App. “4-87. If critical habitat imposes no

regulatory burdens on land users and provides no

conservation benefit to the owl, it should not have

been designated in the first place. See 50 C.EF.R.

§ 424.12(a)(1)(ii).

In short, FWS concluded there would be no

economic impacts from designating critical habitat

across 8.6 million acres of land in four states for the

Mexican spotted owl. On its face, this is an absurd

result that underscores the fundamental problem

' For example, as explained above, critical habitat must be

designated concurrently with the species’ listing, at which time

FWS is unlikely to know what actions might be required for the

future recovery of the species. In addition, FWS is authorized to

exclude from critical habitat areas that are “essential to the

conservation of the species,” 16 U.S.C. § 1532(5A)(G), based on

economic and other impacts. The authority to exclude areas that

meet the definition of critical habitat based on economic grounds

is not consistent with the overarching recovery goal assumed by

the Gifford Pinchot court.

with the baseline approach and demonstrates why it

conflicts with the ESA, as the Tenth Circuit correctly

held. This Court should grant the petition and

reverse the Ninth Circuit’s approval of the baseline

approach.

Il. THE COURT SHOULD REVIEW THE

NINTH CIRCUIT’S UNLAWFUL SUBSTI-

TUTION OF ITS OWN REASONING TO

SUPPORT THE AGENCY’S’ CRITICAL

HABITAT DESIGNATION

A. Statutory and Regulatory Background

In defining critical habitat in 1978, see

Endangered Species Act Amendments of 1978, Pub. L.

No. 95-632, § 2(1), 92 Stat. 3751 (1978), Congress

deliberately distinguished between areas that are

occupied by members of a_ listed species and

unoccupied areas, allowing FWS to designate

unoccupied areas as critical habitat only “upon a

determination ... that such areas are essential to the

conservation of the species.” 16 U.S.C. § 1532(5)(A)(i)

& (ii) (App. 339). Notably, Congress was critical of

FWS’s failure to differentiate between areas “which

are truly critical to the continued existence of a

species” and areas “needed for population expansion,”

stating:

[AJs much as 10 million acres of Forest

Service land is involved in the critical

habitat being proposed for the grizzly bear in

three Western States. Much of the land

involved in this proposed designation is not

habitat that is necessary for the continued

survival of the bear. It instead is being

designated so that the present population

within the true critical habitat can expand.

S. Rep. No. 95-874, at 10 (1978) (App. 359); see also

H.R. Rep. No. 95-1625, at 25, reprinted in 1978

U.S.C.C.A.N. at 9475 (criticizing FWS’s rule defining

critical habitat because it “could conceivably lead to

the designation of virtually all of the habitat of a

listed species as its critical habitat”) (App. 356)."

The two-part definition of critical habitat enacted

by Congress’ effectively creates a_ regulatory

hierarchy. Geographic areas not occupied by members

of the species normally should not be designated as

critical habitat. See, e.g., H.R. Rep. No. 95-1625, at

18, reprinted in 1978 U.S.C.C.A.N. at 9468 (“the

Secretary should be extremely circumspect in the

designation of critical habitat outside of presently

occupied area of the species”) (App. 354). Instead,

land outside of occupied areas may be designated as

critical habitat “only when a designation limited to its

* Prior to the 1978 ESA amendments, FWS adopted rules

governing § 7 consultation, which defined critical habitat as:

“tAlny air, land, or water ... and constituent elements thereof,

the loss of which would appreciably decrease the likelihood of

the survival and recovery of a listed species or a distinct

segment of its population. ... Critical habitat may represent any

portion of the present habitat of a listed species and may include

additional areas for reasonable’ population expansion.”

Interagency Cooperation Regulations; Final Rule, 43 Fed. Reg.

870, 874-75 (Jan. 4, 1978).

present range would be inadequate to ensure the

conservation of the species.” 50 C.F.R. § 424.12(e);

see also Cape Hatteras, 344 F.Supp. 2d at 125

(“Designation of unoccupied land is a _ more

extraordinary event than designation of occupied

lands. [FWS’s] regulation prohibits designation of

unoccupied lands unless designation of occupied

lands is insufficient.”).

Congress also added the requirement that critical

habitat designations be based on the best available

scientific data. Endangered Species Act Amendments

of 1978, Pub. L. No. 95-632, § 11(4), 92 Stat. at 3765

(currently at 16 U.S.C. § 1533(b)(2)). This Court

explained that the purpose of this requirement, which

also appears in ESA § 7(a)(2), is to “ensure that the

ESA not be implemented haphazardly, on the basis

of speculation or surmise” and “to avoid needless

economic dislocation produced by agency officials

zealously but unintelligently pursuing their

environmental objectives.” Bennett, 520 U.S. at

176-77. Thus, the determination of whether an area

is occupied must be based on credible scientific data,

not on speculation.

B. The Court Should Review the Ninth

Circuit’s Determination that All 8.6

Million Acres of Critical Habitat Are

Occupied by Owls

A fundamental rule of administrative law is that

a court, when reviewing an administrative rule, “may

not supply a reasoned basis for the agency’s action

that the agency itself has not given.” State Farm, 463

U.S. at 43 (citing SEC v. Chenery Corp., 332 U.S. 194,

196 (1947)). “It is well established that an agency’s

action must be upheld, if at all, on the basis

articulated by the agency itself.” Jd. at 50 (citing

Chenery, 332 U.S. at 196; Burlington Truck Lines,

Inc. v. United States, 371 U.S. 156, 168 (1962);

Am. Textile Mfrs. Inst., Inc. v. Donovan, 452 U.S.

490, 539 (1981)). In upholding the critical habitat

determination, the Ninth Circuit violated this basic

rule, and then compounded its error by engaging in

speculation about the number of Mexican spotted

owls in the southwest and how much habitat is truly

critical.

FWS designated more than 8.6 million acres of

federal land in four states as critical habitat, with no

evidence that the bulk of this land is used by owls.

FWS knew the locations of the vast majority of the

birds when it designated critical habitat as well as

the locations of habitat essential to their continued

survival — the PACs. FWS stated in the 2004 Critical

Habitat Rule that there are a total of 1,176

designated PACs and that the number of known owls

on federal land in the southwest ranges from 1,176 to

2,352, depending on whether one bird or a pair

occupies each PAC. App. 94.

FWS explained that a PAC includes a minimum

of 600 acres, including the best nesting and roosting

habitat in the area and the most proximal and highly

used foraging areas. App. 88, 218. The agency stated

that some non-territorial “floaters” exist as well as

dispersing juvenile owls. App. 218-219. But FWS

gave no estimate of the number of owls outside PACs,

and did not state that significant numbers of

undiscovered owls exist. Nor did FWS state that

Mexican spotted owls are migratory. Instead, it stated

that owls exhibit high site fidelity; once dispersing

male owls settle in a territory (the area defended by

an owl) they rarely make additional movements

outside their home range. App. 222, 223, 226.

Otherwise, it would make no sense to identify and

protect owl PACs. See App. 396-403 (Recovery Plan

guidance for PACs).

Assuming that each PAC contains 650 acres, /.e.,

the average size of the PACs on National Forests in

Arizona and New Mexico, see App. 425, the total

area is 764,000 acres — less than 10 percent of the 8.6

million acres designated as_ critical habitat.

Consequently, most of the land designated as critical

habitat is outside of a PAC with no verifiable record

of current or recent occupancy by an_e owl.

Nevertheless, FWS did not make the findings

required under its rules to designate unoccupied

areas as critical habitat. See 50 C.F.R. 424.12(e); see

also Cape Hatteras, 344 F. Supp. 2d at 125. Instead,

FWS explained: “Because the specific areas being

designated are within the geographical area occupied

by the species, we (1.e., the Secretary of Interior) are

not required to make a separate determination as to

whether the lands included are essential to the

conservation of the owl.” App. 135. In other words,

FWS stated that critical habitat is “occupied” under

the statute as long as it is found generally within a

species’ range.

As explained, the district court misapprehended

the rationale given by the agency, stating that FWS

“interpreted ‘occupied’ to include those ‘areas where

owls are known to occur or are likely to occur.’”

App. 63-64. In the cited portion of the rule, however,

FWS actually stated that owls are known to occur or

are likely to occur in “protected areas,” i.e., PACs and

pine-oak forests with slopes greater than 40 percent

and where no timber harvesting has occurred in the

past 20 years. App. 100. On appeal, the Ninth

Circuit supplied an entirely different rationale,

asserting that (1) there are actually a much larger

number of owls than the estimate of known owls

given by the agency in its rule, and (2) owls use

far more territory than the area within a PAC.

App. 17-19, 20-21, 24-25. This reasoning was based

on speculation rather than credible scientific data.

First, the Ninth Circuit emphasized that the

PACs “reflect only known owl sites,” contending that

“owl populations have been estimated to be

significantly greater than the maximum 2,352 owls

reflected ‘y the number of PACs.” App. 18

(emphasis original). As support, the court referred to

a 1999 “pilot study” mentioned in the agency’s

environmental assessment, which estimated that the

Upper Gila Mountains Recovery Unit, exclusive of

tribal lands, contains 2,950 owls. But FWS’s

environmental assessment also stated that “la]

reliable estimate of the number of Mexican spotted

owls found range-wide is not currently available.”

App. 420. In the 2004 Critical Habitat Rule, FWS

discussed two population studies, a 1999 study

reporting population declines of 10 percent or greater

in central Arizona and west-central New Mexico, and

a 2003 study concluding that the decline in the

Arizona population was likely temporary, while the

New Mexico population appeared to be continuing to

decline. App. 93-94. Furthermore, FWS responded to

a comment concerning the possible delisting of the

owl by stating that the species’ populations may be

declining. App. 110. The Ninth Circuit’s assertion

that “significantly greater” numbers of unknown owls

exist was simply speculation.

Second, the Ninth Circuit explained that “PACs

represent only the best habitat used by the owl,” and

that owls “regularly use substantial areas outside

their PACs for foraging.”. App. 20 #£(emphasis

original). According to FWS, however, a PAC includes

75 percent of an owl’s foraging territory and “the most

proximal and highly used foraging areas.” App. 88,

218. If a PAC contains approximately 75 percent of

an owl’s foraging area, and PACs account for less

than 800,000 acres of the critical habitat, how is it

possible that owls regularly use the remaining 7.8

million acres for foraging, as the court held? But even

if a much larger area is used to account for foraging

and other activities, the amount of critical habitat is

still grossly excessive. Assuming that the home range

associated with each PAC is 2,000 acres, the total

area equals 2.35 million acres. Further, if the number

of PACs is doubled to account for large numbers of

dispersing juveniles and “floaters” — an assumption

that has no support in the record — the total area still

would be 4.7 million acres. The numbers simply do

not add up, notwithstanding the Ninth Circuit’s

efforts to justify them.

The bottom line is that the amount of land

designated as_ critical habitat is — grossly

disproportionate to the number of known owls on

federal land in the southwest. The Ninth Circuit

affirmed the agency on the basis that thousands of

unknown owls exist requiring millions of acres of

additional critical habitat. This improper speculation

violated the requirement that the designation of

critical habitat be based on the “best scientific data

available.” 16 U.S.C. § 1533(b)(2); Bennett, 520 U.S.

at 176-77. Even worse, it is speculation by the court,

which cannot substitute its own reasoning for that of

the agency in order to uphold the agency’s decision, as

this Court has held. E.g., State Farm, 463 U.S. at 50.

FWS did not rely on the existence of thousands of

undiscovered owls, and there is no credible scientific

data supporting the Ninth Circuit’s inexpert opinion.

The ACGA submits that the Court should review

this result-driven determination, which violated a

fundamental administrative law _ principle § and

implicates important issues concerning’ the

designation of critical habitat, including’ the

appropriate standard for designating unoccupied

areas as critical habitat and the application of the

requirement that critical habitat be designated on the

basis of the best scientific data available

— — _¢ EE

CONCLUSION

For the foregoing reasons, the ACGA urges the

Court to grant the petition and review the Ninth

Circuit’s erroneous determination regarding the

method FWS used in considering economic impacts

under ESA § 4(b)(2) and that court’s erroneous

determination that the entire critical habitat area is

occupied by owls.

Dated: October 1. 2010.

Respectfully submitted,

NORMAN D. JAMES

Counsel of Record

FENNEMORE CRAIG, P.C

3003 North Central Avenue

Suite 2600

Phoenix, AZ 85012-2913

(602) 916-5346

‘THOMAS J. WARD

NATIONAL ASSOCIATION O}

HOME BUILDERS

1201 15th Street, NW

Washington, D.C. 20005-2800

(202) 266-8200

Counsel for Petitioner Arizona

Cattle Growers’ Association

Su reme UOuil, V.o.

, FILED

No. 2 oe ach { 7010

Jn The OFFICE OF THE CLERK

Supreme Court of the United States

ARIZONA CATTLE GROWERS’ ASSOCIATION

Py titiorner

SALAZAR, et al

) y

Respondent

On Petition For Writ Of Certiorari

To The United States Court Of Appeals

For The Ninth Circuit

—_____——_

APPENDIX TO PETITION

FOR WRIT OF CERTIORARI

NORMAN ID). JAME

Counsel of Record

FENNEMORE CRAIG, P.C

3003 North Central Avenue

Suite 2600

Phoenix, AZ 85012-2913

(602) 916-5346

njames@{fclaw.com

THOMAS J. WARD

NATIONAL ASSOCIATION O}

HOME BUILDERS

1201 15th Street, NW

Washington, D.C. 20005-2800

(202) 266-8200

Counsel for Petitioner Arizona

Cattle Growers’ Association

(HM CKLE LAW HRIkF PRINTING (‘t) Mid) JZ #4

ORCA COLLECT (402) 442-2851

APPENDIX

OPINION SOUGHT TO BE REVIEWED

Ariz. Cattle Growers’ Ass’n v. Salazar, 606 F.3d

1160 (9th Cir. 2010)...........0...000000... oe es App. 1

DISTRICT COURT OPINION AND ORDER

Ariz. Cattle Growers’ Ass’n v. Kempthorne, 534

F. Supp. 2d 1013 (D. Ariz. 2008) .......ccccccc0e00+. App. 35

AGENCY RULE REVIEWED ON APPEAL

Final Designation of Critical Habitat for the

Mexican Spotted Owl, 69 Fed. Reg. 53182

CERN: AE Ay MD sacacnsenceesccbiavestccsskech vonsesseccascenes App. 82

STATUTES

SF Male OE UD cso ceusnaacenicchincesetsusasesinancenaces App. 339

16 U.S.C. § 1533(a)1)..... eee eee eeceeeee eee ees App. 340

16 U.S.C. § 1533(a)(3 MA)... eee cee eeeeeee ees App. 340

BPO .2.C. © TBBOTOK ANA). ccecccsssssescsccscccsesseceses App. 34]

16 U.S.C. § 1533(D)Q).cccccccccccccscseevevecevsveeseseees App. 341

REGULATIONS

ee de Oe CD ionencgccsccesnessvnssieceds ate App. 342

50 C.FR. § 424.02(d)..ccccccccccccscecsesveveveveevevevee App. 342

Be ee MON cae pense davnsuentissceeshinid¢cneesesn vives App. 342

as OP ME ia bs ns sabankscevepnsousbansssvshecuneent App. 346

APPENDIX — Continued

LEGISLATIVE HISTORY

H.R. Rep. No. 95-1625 (1978).................ccccseees App. 347

ee. OI. FOG. Tee 1 OI ve nirssvncsceddeensassseabcenns App. 358

Congressional Record, Oct. 14, 1978 (House

Consideration and Passage of H.R. 14104,

Tr Oe PRN vais cies ckvses os casaicstamiversnnnson App. 362

ES.0e. MOD. DOG.. OT-OG7 (IGGL)... css cncsensrscannnsenns App. 372

MISCELLANEOUS PORTIONS OF THE RECORD

U.S. Dep’t of Interior, Fish and Wildlife Service,

Recovery Plan for the Mexican Spotted Owl

(Strix occidentalis lucida) (1995)..............065 App. 380

U.S. Dep't of Interior, Fish and Wildlife

Service, Environmental Assessment for

Designation of Critical Habitat for the

Mexican Spotted Owl (Aug. 18, 2004)......... App. 415

App. ]

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ARIZONA CATTLE GROWERS’ ASSOCIATION,

Plaintiff-Appellant,

KEN SALAZAR, in his official capacity

as Secretary of the Interior; H. DALE

HALL, in his official capacity as

Director of Fish & Wildlife Service;

UNITED STATES DEPARTMENT OF THE

INTERIOR; PAUL K. CHARLTON; ERIC

H. HOLDER JR., Attorney General,

Defendants-Appellees,

CENTER FOR BIOLOGICAL DIVERSITY,

Defendant-intervenor-Appellee.

No. 08-15810

D.C. No.

2:06-CV-01744-

SRB

OPINION

Appeal from the United States District Court

for the District of Arizona

Susan R. Bolton, District Judge, Presiding

Argued and Submitted

November 4, 2009—San Francisco, California

Filed June 4, 2010

Before: Betty B. Fletcher, William C. Canby, Jr.,

and Susan P. Graber, Circuit Judges

Opinion by Judge B. Fletcher:

App. 2

COUNSEL

Norman D. James, Fennemore Craig, Phoenix, Arizo-

na, for the plaintiff-appellant, Arizona Cattle Grow-

ers’ Association.

Andrew C. Mergen, Rebecca Riley, & Robert H. Oak-

ley, U.S. Department of Justice, Environment and

Natural Resources Division, Washington, D.C., for

the defendant-appellee, U.S. Fish and Wildlife Ser-

vice.

Karen Budd-Falen, Budd-Falen Law Offices, LLC,

Cheyenne, Wyoming, for amicus curiae, New Mexico

Cattle Growers’ Association.

Marc D. Fink, Center for Biological Diversity, Duluth,

Minnesota, and Matt Kenna, Western Environmental

Law Center, Durango, Colorado, for defendant-

intervenor-appellee Center for Biological Diversity.

OPINION

B. FLETCHER, Circuit Judge:

Arizona Cattle Growers’ Association (“Arizona Cat-

tle”) appeals from the district court’s grant of sum-

mary judgment rejecting its challenge to the United

States Fish and Wildlife Service’s (““FWS”) designa-

tion of critical habitat for the Mexican Spotted Owl.

Arizona Cattle argues that the FWS unlawfully desig-

nated areas containing no owls as “occupied” habitat

and that the FWS calculated the economic impacts

of the designation by applying an impermissible

App. 3

“baseline” approach. We have jurisdiction under 28

U.S.C. § 1291, and we affirm.

Il BACKGROUND

A. Litigation History

In 1993 the Mexican Spotted Owl was listed as a

threatened species under the Endangered Species Act

(“ESA”). The listing decision prompted a series of

lawsuits alternately seeking to compel the FWS to

designate critical habitat for the owl and, following

the FWS’s designation of habitat, attacking that

designation.

The first such lawsuit was in 1995 to compel the

FWS to designate critical habitat and resulted in the

FWS’s issuing a final rule designating 4.6 million

acres of critical owl habitat, a designation that was

quickly challenged in court and then revoked in 1998.

After another lawsuit was filed to compel the FWS to

designate habitat, the FWS proposed a rule in 2000 to

designate 13.5 million acres of critical habitat and in

2001 the agency promulgated a final rule that again

designated 4.6 million acres. That rule was later

struck down and, rather than propose a new rule, the

FWS reopened the comment period on the rule it

proposed in 2000. In 2004 the FWS designated ap-

proximately 8.6 million acres of critical habitat. It is

this designation, the 2004 Final Rule, that Arizona

Cattle challenges in the current action.

App. 4

Arizona Cattle moved for summary judgment to

set aside the 2004 Final Rule as invalid on several

grounds, only two of which are appealed. First, Arizo-

na Cattle argues that the FWS impermissibly treated

areas in which no owls are found as “occupied” under

the ESA and, in doing so, bypassed the statutory re-

quirements for designating unoccupied areas. Second,

Arizona Cattle challenges the FWS’s determination of

the economic impacts of the designation, arguing

primarily that the FWS applied an impermissible

“baseline” approach that did not account for economic

impacts of the critical habitat designation that are

also attributable to the listing decision. The district

court rejected Arizona Cattle’s arguments and grant-

ed the Appellees’ cross-motions for summary Jjudg-

ment.

B. The 2004 Final Rule

The FWS relied on three types of habitat man-

agement areas, first outlined in a Recovery Plan

created in 1995, as a starting point for the 2004 Final

Rule: protected areas, restricted areas, and other

forest and woodland types. Protected areas are those

areas containing known owl sites, termed Protected

Activity Centers (“PACs”); “steep slope” areas meeting

certain forest conditions; and legally and administra-

tively reserved lands. “PACs include a minimum of

600 acres... that includes the best nesting and roost-

ing (z.e., resting) habitat in the area .... and the most

proximal and highly used foraging areas.” However,

PACs contain only 75% of necessary foraging areas

App. 5

for the owl. Restricted areas include non-steep slope

areas with appropriate forest conditions that are

“adjacent to or outside of protected areas.” “Areas out-

side of PACs, including restricted areas, provide addi-

tional habitat appropriate for foraging.” According to

the 2004 Final Rule, restricted areas “also provide

habitat for nonterritorial birds[,] ... support dispers-

ing juveniles, and ... provide replacement nest/roost

habitat on the landscape through time.”

The FWS used these categories to “develop| |

alternatives for critical habitat designation,” selecting

protected and restricted areas as a starting point for

potential owl critical habitat.' In the 2004 Final Rule

the FWS adopted an alternative that excluded all

tribal lands from designation, refined critical habitat

unit boundaries, and excluded certain areas that did

not contain PACs. The FWS also excluded “Wildland-

Urban Interface” areas identified as being at high

risk of catastrophic wildfire. The 2004 Final Rule

concluded that all of the designated habitat was

occupied by the owl.

Il. STANDARD OF REVIEW

We review the grant of summary judgment de

novo, reviewing directly the agency’s action under the

‘As discussed in greater detail below, the FWS also analyzed

the areas meeting these habitat characteristics for evidence of

owl presence and used this information to refine its eventual

designation.

App. 6

Administrative Procedure Act’s arbitrary and capri-

cious standard. Gifford Pinchot Task Force v. U.S.

Fish & Wildlife Serv., 378 F.3d 1059, 1065 (9th Cir.

2004).

[A]Jn agency rule would be arbitrary and ca-

pricious if the agency has relied on factors

which Congress has not intended it to con-

sider, entirely failed to consider an important

aspect of the problem, offered an explanation

for its decision that runs counter to the evi-

dence before the agency, or is so implausible

that it could not be ascribed to a difference in

view or the product of agency expertise.

Motor Vehicle Mfrs. Ass’n of the U.S., Inc. v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). In

recognition of the agency’s technical expertise the

court usually defers to the agency’s analysis, particu-

larly within its area of competence. See Earth Island

Inst. v. Hogarth, 494 F.3d 757, 766 (9th Cir. 2007);

Nat'l Ass’n of Home Builders v. Norton, 340 F.3d 835,

843-44 (9th Cir. 2003). However, the court need not

defer to the agency when the agency’s decision is

without substantial basis in fact, and there must be a

rational connection between the facts found and the

determinations made. KLarth Island, 494 F.3d at 766.

Il. THE FWS PROPERLY DESIGNATED ONLY

OCCUPIED AREAS AS CRITICAL HABITAT

We first consider whether the owl “occupied” the

designated areas, as defined by the ESA. We conclude

that the FWS permissibly interpreted the word

App. 7

“occupied” in the ESA to include areas where the owl

was likely to be present and that, applying this

definition, the FWS designated only “occupied” areas.

A. The ESA and the Definition of “Occu-

pied”

The ESA defines a species’ critical habitat as

(i) the specific areas within the geo-

graphical area occupied by the species, at the

time it is listed ... , on which are found

those physical or biological features (I) es-

sential to the conservation of the species and

(11) which may require special management

considerations or protection; and

(ii) specific areas outside the geograph-

ical area occupied by the species at the time

it is listed ... , upon a determination by the

Secretary that such areas are essential for

the conservation of the species.

16 U.S.C. § 1532(5)(A). The statute thus differenti-

ates between “occupied” and “unoccupied” areas,

imposing a more onerous procedure on the designa-

tion of unoccupied areas by requiring the Secretary to

nake a showing that unoccupied areas are essential

for the conservation of the species. Although this

appeal turns primarily on the factual question of

whether the FWS treated unoccupied areas as occu

pied to avoid this more onerous process, we face the

preliminary issue of what it means for an area to be

“occupied” under the ESA.

App. 8

It is useful to unpack this inquiry into two com-

ponents: uncertainty and frequency. Uncertainty is a

factor when the FWS has reason to believe that owls

are present in a given area, but lacks conclusive proof

of their presence. Frequency is a factor when owls are

shown to have only an intermittent presence in a

given area. Occasionally, both factors will play a part

in determining whether an area is “occupied.” Be-

cause the ESA permits only one of two possible out-

comes for this inquiry—occupied or unoccupied—

when the result is best characterized by a spectrum,

we must determine the scope of the FWS’s authority

to categorize as “occupied” those areas that may not

fit neatly into either pigeonhole.

We have ampre guidance on the “uncertainty”

issue. The ESA provides that the agency must de-

termine critical habitat using the “best scientific

data available.” 16 U.S.C. § 1533(b)(2); see also id.

§ 1533(b)(6)(C)(ii). This standard does not require

that the FWS act only when it can justify its decision

with absolute confidence. See, e.g., Pub. Citizen

Health Research Group v. U.S. DOL, 557 F.3d 165,

176 (3d Cir. 2009); Greenpeace Action v. Franklin, 982

F.2d 1342, 1354-55 (9th Cir. 1992). Although the FWS

cannot act on pure speculation or contrary to the evi-

dence, the ESA accepts agency decisions in the face of

uncertainty. Compare Ariz. Cattle Growers’ Ass’n v.

U.S. Fish & Wildlife, 273 F.3d 1229, 1244 (9th Cir.

2001), with Sw. Ctr. for Biological Diversity v. Bab-

bitt, 215 F.3d 58, 60-61 (D.C. Cir. 2000).

App. 9

Turning to the “frequency” component, Arizona

Cattle asserts that the word “occupied” is unambigu-

ous and must be interpreted narrowly to mean areas

that the species “resides in.” In the context of the owl,

they argue that such areas consist only of the 600-

acre PACs. The FWS argues for a broader interpreta-

tion. It suggests that where a geographic area is used

with such frequency that the owl is likely to be pre-

sent, the agency may permissibly designate it as

occupied. FWS contends that, at a minimum, this

includes the owl’s “home range” and may include

other areas used for intermittent activities.

We cannot agree that “occupied” has an unam-

biguous, plain meaning as Arizona Cattle suggests.

The word “occupied,” standing alone, does not provide

a clear standard for how frequently a species must

use an area before the agency can designate it as

critical habitat. Cf Amoco Prod. Co. v. Vill. of

Gambell, 480 U.S. 531, 548 n.14 (1987) (explaining

that there is “clearly” no plain meaning to the phrase

“public lands which are actually occupied”). Merely

replacing the word “occupied” with the word “resides”

does not resolve this ambiguity. Rather, Arizona

Cattle’s argument that “occupied” is limited to areas

where the species “resides” only underscores the

“Home range is the “area used by an animal during its

normal activities”; in the case of the owl, estimates of the owl’s

home range size have varied substantially. Studies cited in the

1995 Recovery Plan, for example, estimated home range sizes

varying from a low of 645 acres to a high of 3,831 acres.

App. 10

flexibility of determining whether an area is “occu-

pied.” Viewed narrowly, an owl resides only in its

nest; viewed more broadly, an owl resides in a PAC;

and viewed more broadly still, an owl resides in its

territory or home range. Determining whether a

species uses an area with sufficient regularity that it

is “occupied” is a_ highly contextual and fact-

dependent inquiry. Cf Cape Hatteras Access Pres.

Alliance v. United States DOI, 344 F. Supp. 2d 108,

119-20 (D.D.C. 2004). Relevant factors may include

how often the area is used, how the species uses the

area, the necessity of the area for the species’ conser-

vation, species characteristics such as degree of

mobility or migration, and any other factors that may

bear on the inquiry. Such factual questions are within

the purview of the agency’s unique expertise and are

entitled to the standard deference afforded such

agency determinations. See Earth Island, 494 F.3d at

766.

Having found the term “occupied” dependent on a

number of factors, we must look to whether the

agency’s proposed interpretation is permissible as

applied to the owl’s habits and habitat. Arizona Cattle

argues that the FWS has never previously defined

“occupied critical habitat.” Thus, it contends, the

agency interpretation urged on appeal is merely a

self-serving construction found only in the FWS’s

legal briefs and is entitled to no deference. But the

agency has defined “occupied critical habitat” in a

manner very similar to the proposed interpretation.

App. 11

In its Endangered Species Consultation Handbook,

the agency defines “occupied critical habitat” as

critical habitat that contains individuals of

the species at the time of the [Section 7] pro-

ject analysis. A species does not have to oc-

cupy critical habitat throughout the year for

the habitat to be considered occupied (e.g.

migratory birds). Subsequent events affect-

ing the species may result in this habitat be-

coming unoccupied.

U.S. Fish & Wildlife Serv. & Nat'l Marine Fisheries

Serv., Endangered Species Consultation Handbook 4-

34 (1998), available at http://www.fws.gov/endangered/

pdfs/Sec7/handbook/ch4.pdf. This definition recogniz-

es that a species need not be present continuously for

habitat to be considered “occupied.” It also demon-

strates that “occupied” habitat is not limited to areas

in which the species “resides,” as it includes habitat

that merely “contains individuals of the species.” At

the very least, this definition is entitled to deference

“proportional to its power to persuade” pursuant to

the Supreme Court’s holding in Skidmore v. Swift &

Co., 323 U.S. 134 (1944), and subsequent cases. See

United States v. Mead Corp., 533 U.S. 218, 235 (2001)

(giving Skidmore deference to interpretations con-

tained in agency manuals or enforcement guidelines);

Bamonte v. City of Mesa, 598 F.3d 1217, 1228 (9th Cir.

2010) (explaining that, under Skidmore, agency

positions not afforded the force of law are entitled to

deference “proportional to [their] power to persuade”

(internal quotation marks omitted)). The definition in

App. 12

the handbook appears to be the result of the agency’s

considered judgment and, for the reasons we express

below, we are persuaded by the agency’s position that

“occupied” should not be interpreted in a restrictive

fashion.

The FWS permissibly rejected Arizona Cattle’s

“resides in” interpretation as too narrow. Looking to

the context of the present appeal provides a solid

justification for this rejection. The record demon-

strates, for example, that PACs include only 75% of

the owl’s foraging habitat. Even if we assume that

each owl “resides in” a PAC, we are not persuaded

that Congress intended a definition of “occupied” that

would exclude areas likely to be regularly used by the

species. This is particularly true where those areas

contain resources necessary for species conservation.

Arizona Cattle’s proposed interpretation would also

exclude habitat for nonterritorial owls that may not

be under constant or uniform use despite frequent

owl presence. Cf. Cape Hatteras Access Pres. Alliance,

344 F. Supp. 2d at 119-20 (noting the agency’s exami-

nation of areas for “consistent use”).

The FWS has authority to designate as “occu

pied” areas that the owl uses with sufficient regulari-

ty that it is likely to be present during any reasonable

span of time. This interpretation is sensible when

considered in light of the many factors that may be

relevant to the factual determination of occupancy.

For example, Arizona Cattle’s “reside in” interpreta-

tion would make little sense as applied to non-

territorial, mobile, or migratory animals—including

App. 13

the owl—for which it may be impossible to fix a

determinate area in which the animal “resides.” Such

a narrow interpretation also would mesh poorly with

the FWS’s authority to act in the face of uncertainty.*

We are further persuaded by our decision in

Gifford Pinchot. In that case we invalidated an agen-

cy interpretation of the ESA that effectively eliminat-

ed the independent significance of critical habitat as

a measure to protect endangered species. See Gifford

Pinchot, 378 F.3d at 1070; see aiso Sierra Club v. U.S.

Fish & Wildlife Serv., 245 F.3d 434, 441-43 (5th Cir.

2001). The same logic leads us here to reject Arizona

Cattle’s attempt to shackle the FWS with an overly

narrow definition of “occupied.” Critical habitat—

including “occupied critical habitat”—-is defined in

relation to areas necessary for the conservation of the

species, not merely to ensure its survival. See 16

U.S.C. § 1532(5)A); Gifford Pinchot, 378 F.3d at

1070; Sierra Club, 245 F.3d at 441-42. Limiting the

‘It is easy to envision other contexts in which this interpre

tation is even less helpful: consider salmon that swim upstream

to spawn, periodical cicadas that live underground for years

before emerging as adults, migratory birds, or other animals

that require a diverse array of habitats.

‘By way of example, because PACs represent only known

owl sites, Arizona Cattle’s proposed interpretation that only

PACs are “occupied” because they reflect where the ow] “resides”

is likely substantially underinclusive and places a burden on the

agency to count every owl. See Sw. Ctr. for Biological Diversity,

215 F.3d at 60-61 (explaining that the ESA’s requirement to use

the best scientific data available did not require the agency to

conduct independent studies to count every single animal!)

App. 14

agency to designating habitat only where the owl

“resides” focuses too narrowly on ow] survival and

ignores the broader purpose of the critical habitat

designation.

Our decision is also informed by Supreme Court

precedent that has treated the word “occupied” with

considerable breadth. In Amoco Production Co., the

Court distinguished a statute referring to land “in

Alaska” from a statute referring to “public lands

which are actually occupied.” 480 U.S. at 547-48 n.14.

The Court explained that while “in Alaska” had a

“precise geographical/political meaning| |,” the phrase

“public lands which are actually occupied” did not and

was properly construed to include substantial areas

of adjacent waters. Jd. (citing Hynes v. Grimes Pack-

ing Co., 337 U.S. 86, 110-16 (1949)). The Court’s

interpretation of “actually occupied” as_ including

adjacent waters suggests that it is permissible for the

FWS to interpret “occupied” more broadly than

merely the area where an individual or species “re-

sides.”

Finally, this interpretation is supported by the

purpose of the ESA “‘to prevent animal and plant

species endangerment and extinction caused by man’s

influence on ecosystems, and to return the species to

the point where they are viable components of their

ecosystems.” Trout Unlimited v. Lohn, 559 F.3d 946,

949 (9th Cir. 2009) (quoting H.R. Rep. No. 95-1625,

at 5 (1978), reprinted in 1978 U.S.C.C.A.N. 9458,

App. 15

9455).° Where data are inconclusive or where habitat

is used on a sporadic basis, allowing the FWS to

designate as “occupied” habitat where the species is

likely to be found promotes the ESA’s conservation

goals and comports with the ESA’s policy of “institu-

tionalized caution.” See 16 U.S.C. § 1531; cf, e.g.,

Defenders of Wildlife v. Flowers, 414 F.3d 1066, 1074

(9th Cir. 2005); Sierra Club v. Marsh, 816 F.2d 1376,

1386 (9th Cir. 1987) (“Congress clearly intended that

[agencies] give the highest of priorities and the bene-

fit of the doubt to preserving endangered species.”

(internal quotation marks omitted)).

It is possible for the FWS to go too far. Most

obvious is that the agency may not determine that

areas unused by owls are occupied merely because

those areas are suitable for future occupancy. Such a

position would ignore the ESA’s distinction between

occupied and unoccupied areas. See Ariz. Cattle

Growers’ Ass’n, 273 F.3d at 1244. We note as a caveat,

however, that determining whether an area is occu-

pied or merely will be occupied in the future may be

*Arizona Cattle cites to the legislative history surrounding

the enactment of the statutory definition of “critical habitat.”

Although this history suggests that Congress was concerned

that agencies were giving equal status to “lands needed for

population expansion” as to those presently occupied by the

species and that Congress intended the agency to be circumspect

about designating unoccupied areas, the history sheds little light

on what frequency of species use renders an area “occupied,” the

issue of substance in this case. See S. Rep. No. 95-874, at 10

(1978).

App. 16

complicated in the context of migratory or mobile

species. The fact that a member of the species is not

present in an area at a given instant does not mean

the area is suitable only for future occupancy if the

species regularly uses the area.°

Having thus framed the inquiry, we turn to the

primary issue before the court: whether the FWS

included unoccupied areas in its critical habitat

designation.

B. The FWS Did Not Designate Unoccu-

pied Areas as Critical Habitat

After a thorough review of the record we find

that the FWS did not arbitrarily and capriciously

treat unoccupied areas as occupied. We reiterate that

when an agency is acting within its expertise to make

a scientific determination “a reviewing court must

generally be at its most deferential.” Balt. Gas &

Elec. Co. v. NRDC, 462 U.S. 87, 103 (1983); Lands

Council v. McNair, 537 F.3d 981, 993 (9th Cir. 2008)

(en banc), abrogated in part on other grounds by

Winter v. NRDC, 129 S. Ct. 365 (2008).

*Consider, for instance, habitat that a currently living owl

has migrated through—and used—in the recent past, and

through which owls are hkely to migrate and use simiitarly in

the future. While owl presence in this area at a particular time

may be limited, we are disinclined to nold that the FWS must

find this area “unoccupied” simply because, despite owl use in

the recent past and foreseeable future, no owl is using the area

during a particular temporal window.

App. 17

The FWS took, as a starting point for its 2004

designation, the three types of habitat management

areas that it developed in the 1995 Recovery Plan.

Simply by virtue of the definitions of these habitat

management types, there is a direct link between the

designated territory and owl occupancy. PACs are

explicitly defined with reference to frequent owl

presence, and non-PAC protected areas and restricted

areas are “devised around” and “adjacent to” PACs.

More to the point, we note significant record support

for owl] occupancy of these areas in the form of studies

correlating the habitat characteristics of protected

and restricted areas with owl presence. Cf. Gifford

Pinchot, 378 F.3d at 1066; cf also Envtl. Prot. Info.

Ctr. v. U.S. Forest Serv., 451 F.3d 1005, 1017 (9th Cir.

2006) (rather than counting individual animals, an

agency may in appropriate cases use habitat as a

proxy).

The agency did not stop there. It further refined

its designation by adding and removing areas on the

basis of evidence of owl occupancy or lack thereof. A

striking example of this is the FWS’s analysis of owl

occupancy in the proposed critical habitat in Arizona.’

This analysis proceeds, unit by unit, through the

addition of areas to the critical habitat proposal on

the basis of information about known owl} locations. It

also demonstrates that the FWS, even where it could

‘This document is particularly significant because Arizona

contains the largesi 2reas of designated critical habitat.

App. 18

not identify known owl sites (PACs) with certainty,

was considering other evidence of current owl] use in

designating habitat, such as “owl calling routes.”

A point of recurring significance to our analysis is

that PACs reflect only known owl sites. Although the

2004 Final Rule identified 1,176 PACs, owl popula-

tions have been estimated to be significantly greater

than the maximum 2,352 owls reflected by this

number of PACs. For example, the 2004 Environmen-

tal Analysis notes that more owls than this may exist

in a single recovery unit: “a pilot study (Ganey et al.,

2000) conducted in 1999 estimated the number of

Mexican spotted owls for the Upper Gila Mountains

Recovery Unit, exclusive of tribal lands, as 2,950.”

Since the listing of the species, the FWS has repeat-

ediy revised upward its estimates of owl populations

and identified new PACs. Likewise, the 2004 Final

Rule recognizes that “[a]dditional surveys are likely

to document more owls.” Efforts by the FWS to identi-

fy other evidence of owl presence when it is unable to

fix the location of a PAC with certainty are, therefore,

highly significant.

Even more significant is the fact that the FWS

excluded areas with evidence of few or no owls. The

2004 Final Rule explains that the FWS “did not

designate some areas that are known to have widely

scattered owl sites, low owl population densities,

and/or marginal habitat quality.” We find this state-

ment supported by record evidence explaining the

FWS’s decision to exclude several areas due to an

absence of owls. We likewise find that the record

App. 19

demonstrates that where the FWS did include areas

in which owl presence was uncertain—such as the

North Kaibab Ranger District (“NKRD”), the

Peloncillo Mountains, the Prescott National Forest,

and certain “sky islands”—it did so after thoughtful

consideration of owl occupancy. Finally, we note that

a comparison of the areas designated in the 2004

Final Rule to PAC locations confirms that the FWS

excluded the vast majority of critical habitat units

that contained no PACs and refined the boundaries of

the critical habitat units to exclude large areas that

are distant from PACs.

The FWS’s process for designating critical habi-

tat gives us a strong foundation for our conclusion

that the agency did not arbitrarily and capriciously

treat areas in which owls are not found as “occupied.”

With this context in mind, we turn to Arizona Cattle’s

specific arguments that the agency improperly desig-

nated unoccupied areas as critical habitat and our

reasons for disagreement.

1. The FWS Did Not Impermissibly

Change Course in the 2004 Final

Rule from Its Approach to Prior

Designations

Arizona Cattle argues that the 1995 Recovery

Plan and the agency’s prior proposed habitat designa-

tions demonstrate that the FWS considered only

PACs to be occupied and intended non-PAC areas—

specifically restricted habitat—-to provide future owl

App. 20

habitat. This, it contends, is proof that the 2004 Final

Rule must have falsely labeled restricted areas as

“occupied.” Arizona Cattle singles out an e-mail that

it contends is a smoking gun demonstrating that the

FWS made an abrupt shift in its description of pro-

tected and restricted areas, deciding to refer to these

areas as “suitable habitat outside of PACs” rather

than “unoccupied habitat.”

We have already suggested some of the reasons

why it would be inappropriate to read the 2004 Final

Rule as treating PACs as the only areas occupied by

the owl. We pause here to explain this conclusion

further. First, the 2004 Final Rule is explicit that

PACs represent only the best habitat used by the owl.

The record also demonstrates that the FWS believed

that owls may use habitat within a one-mile buffer

around PACs and that PACs were intended to “mini-

mize activities occurring in close proximity to owl

nests ... and preserve the best habitat close to

known nesting and roosting sites.” As already dis-

cussed, the record reflects that known, territorial

owls regularly use substantial areas outside of their

PACs for foraging. For these owls, we find that the

agency’s suggestion that the owl’s home range is an

appropriate measure of the territory occupied by the

owl is well-supported by the record.

Even that measure would not present a complete

picture of the territory occupied by the ow] because

PACs reflect only known owl sites. It is implausible to

beheve the FWS intended—or was statutorily re-

quired—to limit “occupied” habitat to PACs, or to the

App. 21

home range of only known owls, when such a decision

would be significantly underinclusive. Similarly, it is

clear that PACs and the owl’s home range do not

reflect areas used by nonterritorial owls or areas used

for certain other intermittent owl activities, such as

dispersal or migration. The agency points out in the

2004 Final Rule, for example, evidence that “some

[owls] migrate considerable distances 12-31 miles...

during the winter.” It does not appear that the FWS

intended to limit “occupied” habitat to PACs, nor was

this decision arbitrary and capricious.

As to the FWS’s purported shift in approach

between the 2004 Final Rule and earlier agency

actions, we find that it reflects merely a change in the

agency’ perspective, a movement away from an

unnecessarily restrictive view of the areas the owl

“occupies.” In other words, the apparent difference

between the 2004 Final Rule and the agency’s prior

approach did not arise because the agency suddenly

decided to treat substantial areas where owls were

not present as “occupied.” The agency simply reas

sessed its previous approach, which focused narrowly

on “known nesting sites” as the areas occupied by the

owl, adopting the broader approach that we have held

reflects the proper definition of “occupied.” See Nat’

*The 2004 Final Rule also notes that “some [owls] remain in

the general area but exhibited shifts in habitat use patterns.”

Such shifts in habitat use could also explain some of the state-

ments in the previous rule that discuss replacement of nesting

and roosting habitat over time.

App. 22

Ass’n of Home Builders v. Defenders of Wildlife, 551

U.S. 644, 658-59 (2007) (explaining that agencies may

change their minds if proper procedures are followed

and federal courts ordinarily review only an agency’s

final action); Motor Vehicle Mfrs. Ass’n, 463 U.S. at

44; PLMRS Narrowband Corp. v. FCC, 182 F.3d 995,

1001-02 (D.C. Cir. 1999). Because we conclude that

the 2004 Final Rule remained withir. permissible

bounds, we find no fault in the rule on this front.

The e-mail that Arizona Cattle contends demon-

strates the FWS’s shift in approach is explicit that

this change was one of agency perspective and was

entirely consistent with the evidence of the areas

used by the owl. The e-mail states that, in its previ-

ous discussion of “occupied habitat,” the agency was

“really referring to ... known nesting sites” and that

“non-PAC protected areas, restricted areas, and other

forest and woodland types within one mile of a PAC

. may be used by owls at any given time.” It ex-

plains that, although a narrow definition of “occupied

habitat” that focused exclusively on nesting might not

include these areas, non-PAC protected areas and

restricted areas “may potentially harbor an owl at

any given time.” The same e-mail states that the

FWS believed these areas were, in fact, presently

used by owls—even if they had been previously

labeled “unoccupied” under an unnecessarily restric-

tive approach to that term. Thus, statements in prior

agency actions as to the suitability of certain areas

for “future owl occupancy” or characterizing restricted

areas as “unoccupied” lose their force because they

App. 23

reflect this change in approach rather than a contra-

diction as to owl presence or use of these areas. We

will “uphold a decision of less than ideal clarity if the

agency’s path may be reasonably discerned.” Nat’

Ass'n of Home Builders, 551 U.S. at 658 (internal

quotation marks omitted); see also Wetlands Action

Network v. U.S. Army Corps of Eng’rs, 222 F.3d 1105,

1122 n.8 (9th Cir. 2000).

We find the e-mail’s explanation for the agency’s

change in perspective supported by the record. For

example, the record contains notes taken at a meet-

ing that demonstrate the FWS’s focus on assuring

that the agency could identify a “reasonable expecta-

tion” of occupancy in the areas it planned to desig-

nate. The record likewise demonstrates the agency’s

view that restricted areas are “temporally occupied”

even if not used full-time for nesting purposes. As we

have already explained, there is sufficient record

support for the agency’s decision in the 2004 Final

Rule not to treat PACs as the only areas occupied by

the owl. Another example is an e-mail in which the

agency explains that, although the exclusion of cer-

tain land resulted in the FWS’s proposing to desig-

nate an area that contained no PACs, the agency

considered the restricted area occupied.

The FWS was not attempting to designate areas

devoid of owls as “occupied” in the 2004 Final Rule.

Although seeming inconsistencies between the FWS’s

decisions may shed light on the agency’s process, and

changes from past positions that are unsupported by

evidence are unlawful, ultimately it is the 2004 Final

App. 24

Rule that is before the court and our inquiry is

whether the FWS exceeded its authority or deviated

from the evidence.’ See Nat’l Ass’n of Home Builders,

551 U.S. at 658-59; Wetlands Action, 222 F.3d at 1122

n.8. The FWS’s analysis solidly demonstrates the

connection between the designated areas and owl

occupancy, notwithstanding that the agency previous-

ly adopted an unnecessarily restrictive view of the

areas the owl occupied as limited to known nesting

sites. The agency’s approach in the 2004 Final Rule

was supported by the evidence and within permissi-

ble bounds.

2. The Amount of Land Designated Is

Not Disproportionate to the Num-

ber of Owls

Arizona Cattle also argues that even using the

owl’s substantially larger home range as the appro-

priate measure for the territory occupied by the owl,

"Arizona Cattle does point to a few statements in the record

questioning owl presence in areas proposed for designation in

what eventually became the 1995 Final Rule. These statements

are dated and their applicability to the 2004 Final Rule is

questionable. The record reflects evolving agency knowledge as

to owl population and location in the decade between the listing

of the owl and the 2004 Final Rule, a point that is explicit in the

1995 Recovery Plan and that Arizona Cattle acknowledges in its

reply brief. These isolated statements of disagreement with the

FWS’s approach in a prior rule promulgated in the mid-1990s do

not overcome the record support for the agency’s decision in

2004.

App. 25

the FWS has designated a grossly disproportionate

amount of land compared to the amount the ow!

occupies. It ties this argument to a seemingly simple

calculation: multiplying the 1,176 PACs by the maxi-

mum estimated home range size of the ow] of 3,831

acres, the resultant area is only approximately 4.5

million acres, in contrast to the 8.6 million acres

designated. This calculation, however, rests on a

faulty assumption that the PACs represent all extant

owls. We have already explained that PACs reflect

only known owl sites and that there is record support

for the existence of substantially greater numbers of

owls and undiscovered sites. Nor does this calcula-

tion, tied as it is to the number of PACs, reflect areas

used by nonterritorial owls, areas used for juvenile

dispersal, or areas used for owl migration. Arizona

Cattle’s argument does not overcome the strong

evidence that the FWS was focused on designating

areas occupied by OW

"We note again here the complexity of determining whether

an area is occupied in the context of a mobiie species. Areas used

for juvenile dispersal, for example, may be necessary for ow!

survival but only used for portions of the year. The record

reflects that juvenile dispersal involves the connection of owl

groups into “metapopulations.” It does not mean that habitat

used for dispersal is not used by owls, but is rather under

intermittent use for routine owl movement from one area to

another. Regardless, we do not rest our holding on this point

because, even absent this rationale, the FWS has sufficiently,

justified the designation

App. 26

3. The FWS’s Decision to Include the

North Kaibab Ranger District in

the Designation Was Not Arbitrary

and Capricious

Finally, we turn to the single specific location’

where Arizona Cattle contends that the FWS has

failed to demonstrate owl occupancy: the NKRD.

Citing a letter to the FWS detailing certain studies

conducted in the area without owl sightings, Arizona

Cattle maintains that the agency treated the NKRD

as occupied despite evidence that owls were in fact

absent from the District. Arizona Cattle, however,

overlooks a responsive memorandum by the agency in

which the F'WS explains that it declined to rely on

those studies because it concluded that the studies

were not reliable evidence that owls were not present.

This memorandum also explains the reasons for the

agency's conclusion that owls are present, including a

history of owl sightings in the NKRD. This is precise-

ly the sort of decision within the agency’s technical

expertise that we are not free to second-guess. This

memorandum, along with the FWS’s diligent review

of the proposed designation for owl occupancy,

Although Arizona Cattle points to areas where it contends

that the amount of land designated is disproportionate to the

number of PACs contained in the area, this argument is simply

a variant on Arizona Cattle’s mathematical argument we reject

above. In addition, even as to known owls the argument relies

on the 600-acre PACs, rather than a more accurate measure of

occupied area

App. 27

detailed above, persuades us that the FWS’s decision

had a sound basis in fact.

We conclude that the agency designated only

“occupied” areas as critical habitat, even though it

may not have identified with certainty in all cases a

known owl constantly inhabiting that territory. The

process that the FWS used to select habitat for desig-

nation, the measures it took to exclude areas where

owls were absent or use by owls was infrequent, and

its careful work to confirm the presence of owls in the

designated areas demonstrate that the FWS desig-

nated areas that correspond to habitat where the owl

is likely to be found. The agency action was neither

based on speculation nor counter to the evidence.

IV. THE FWS’S ECONOMIC ANALYSIS WAS

NOT ARBITRARY AND CAPRICIOUS

Arizona Cattle challenges the FWS’s analysis of

the economic impacts of the critical habitat designa-

tion. For the reasons expressed below, we find no

fault with the agency’s economic analysis.

A. The FWS Permissibly Used the Base-

line Approach in Conducting the Eco-

nomic Analysis

The decision to list a species as endangered or

threatened is made without reference to the economic

effects of that decision. See N.M. Cattle Growers Ass’n

v. U.S. Fish & Wildlife Serv., 248 F.3d 1277, 1282

(10th Cir. 2001). Listing alone results in certain

App. 28

protections for the species, including a requirement

that federal agencies “insure that any action author-

ized, funded, or carried out by such agency ... is not

likely to jeopardize the continued existence of any

endangered species or threatened species.” 16 U.S.C.

§ 1536(a)(2); see also, e.g., id. § 1538. These protec-

tions may impose economic burdens.

In contrast to the listing decision, under the ESA

the agency may designate critical habitat only after

considering the economic impact of the designation on

any particular area. Jd. § 1533(b)(2). The agency has

discretion to exclude any area from the designation if

the agency determines “that the benefits of such

exclusion outweigh the benefits of specifying such

area as part of the critical habitat,” unless exclusion

would result in extinction of the species. Jd. This can

be a delicate balancing act. After critical habitat is

designated, the ESA requires that federal agencies

“ansure that any action authorized, funded, or carried

out by such agency ... is not likely to... result in the

destruction or adverse modification” of critical habi-

tat. Jd. § 1536(a)(2); see also Gifford Pinchot, 378 F.3d

at 1069.

The crux of the parties’ dispute over the FWS’s

economic analysis is whether the FWS was required

to attribute to the critical habitat designation eco-

nomic burdens that would exist even in the absence of

that designation. The parties agree that the FWS

applied the “baseline” approach to the economic

analysis. Under this approach, any economic impacts

of protecting the owl that will occur regardless of the

App. 29

critical habitat designation—in particular, the bur-

dens imposed by listing the owl—are treated as part

of the regulatory “baseline” and are not factored into

the economic analysis of the effects of the critical

habitat designation.” Arizona Cattle, relying on the

Tenth Circuit’s decision in New Mexico Cattle Growers

Association, argues that this was error and that the

F'WS was required to apply a “co-extensive” approach

to the economic analysis. Under the co-extensive

approach, the agency must ignore the protection of a

species that results from the listing decision in con-

sidering whether to designate an area as critical

habitat. Any economic burden that designating an

area would cause must be counted in the economic

analysis, even if the same burden is already imposed

by listing the species and, therefore, would exist even

if the area were not designated.

In New Mexico Cattle Growers Association the

Tenth Circuit held that the baseline approach was

impermissible under the ESA. See 248 F.3d at 1285.

It did so, however, relying on an FWS regulation that

defined “destruction or adverse modification” as

effectively identical to the standard for determining

“For example, suppose that the decision to list the owl as

endangered resulted in a ban on logging in a particular area,

and that designating that area as critical habitat would inde-

pendently result in the same ban. Because the listing decision

would result in the logging ban even if the agency did not

designate critical habitat in that area, the baseline approach

would not treat the ban as a burden that was imposed by the

critical habitat designation.

App. 30

whether an agency action places a species in “jeop-

ardy.” See id. at 1283-85; see also Gifford Pinchot, 378

F.3d at 1069-70." The Tenth Circuit held that this

regulation rendered an economic analysis relying on

the baseline approach “virtually meaningless” be-

cause it allowed the agency, in all cases, to find no

economic impact to the critical habitat designation.

See N.M. Cattle Growers Ass’n, 248 F.3d at 1283-85.

Our court and others have since found the agency’s

definition of “adverse modification” too narrow. See

Gifford Pinchot, 378 F.3d at 1070; see also Ctr. for

Biological Diversity v. BLM, 422 F. Supp. 2d 1115,

1151-53 (N.D. Cal. 2006); Cape Hatteras Access Pres.

Alliance, 344 F. Supp. 2d at 128-30. We therefore

reject the Tenth Circuit’s approach in New Mexico

Cattle Growers Association as relying on a faulty

premise and hold that the FWS may employ the

baseline approach in analyzing the critical habitat

designation.

The baseline approach is, if anything, more

logical than the co-extensive approach. The very

notion of conducting a cost/benefit analysis is under-

cut by incorporating in that analysis costs that will

exist regardless of the decision made.” Moreover, the

“The Tenth Circuit declined to address whether the FWS’s

definition of “adverse modification” was invalid. See N.M. Cattle

Growers, 248 F.3d at 1283-85.

“We note further the confusion engendered by the co-

extensive approach on the “benefit” side of the equation. If the

FWS must consider “burdens” imposed by the critical habitat

designation as if there were no protections imposed by the

(Continued on following page)

App. 31

practical relevance of the economic analysis under the

ESA is to determine the benefits of excluding or

including an area in the critical habitat designation:

if there is no net benefit (such as a reduction in

economic impacts) to excluding the area, the agency

must designate it. See 16 U.S.C. § 1533(b)(2). The

baseline approach, in contrast to the co-extensive

approach, reflects this purpose.

Congress has directed the FWS to list species,

and thus impose a regulatory burden, without consid-

eration of the costs of doing so. See 16 U.S.C.

§ 1533(a); N.M. Cattle Growers, 248 F.3d at 1282. It

would be strange to conclude that Congress intended

the FWS to consider costs at the critical habitat

phase that the agency was barred from considering at

the listing phase where, as a result, the analysis

would bear little relationship to reality.” It would also

be strange to conclude that Congress intended to use

the critical habitat designation to require the agency

to consider the previously irrelevant costs of listing

the species, particularly given that the decision to

listing decision, must it also assume that in the absence of the

critical habitat designation the species is entirely unprotected in

considering the “benefits” of designating a particular area? The

co-extensive approach runs the risk of becoming a_ purely

academic exercise.

“Although the Tenth Circuit is likely correct that inclusion

of the costs of listing in the critical habitat analysis does not

affect the FWS’s listing process, see N.M. Cattle Growers, 248

F.3d at 1285, it has clear potential to distort the critical habitat

analysis.

App. 32

exclude an area from critical habitat for economic

reasons is discretionary. See 16 U.S.C. § 1533(b)(2);

Bennett v. Spear, 520 U.S. 154, 172 (1997). The sim-

pler explanation is that the economic analysis of the

critical habitat designation is exactly what it sounds

like and is not intended to incorporate the burdens

imposed by listing the species.

Arizona Cattle argues that if the FWS designated

critical habitat at the same time as it listed the

species, see 16 U.S.C. § 1533(a)(3), there would be no

baseline to which to compare the critical habitat

designation. Even if the FWS lists the species concur-

rently with designating critical habitat, however,

listing the species is a necessary antecedent to desig-

nating habitat. We see little inconsistency with the

FWS’s considering the burdens imposed by the criti-

cal habitat designation while taking into account

those necessarily imposed by the listing decision even

in these circumstances.

Finally, Arizona Cattle argues that the baseline

approach allows the FWS to treat the economic

analysis as a mere procedural formality. We reject the

argument that, as a matter of course, the FWS will

neglect its duty to perform a thorough economic

analysis. To hold otherwise would amount to a pre-

sumption that the FWS will act in an arbitrary and

capricious fashion, a presumption that is inconsistent

with the deference the court affords agencies. See,

e.g., Smith v. U.S. Forest Serv., 33 F.3d 1072, 1077 n.2

(9th Cir. 1994). Furthermore, contrary to Arizona

Cattle’s contention that the impact of designating

App. 33

critical habitat cannot be negligible, the costs of a

critical habitat designation could, in fact, be sub-

sumed by the burdens imposed by listing the spe-

cies—any burden that is entirely “co-extensive” with

the listing decision will reflect exactly such a case.

We hold that the FWS permissibly applied the

baseline approach in conducting the economic analy-

sis of the effects of the designation.

B. Remaining Arguments

We can easily dispose of Arizona Cattle’s two

remainin;, challenges to the FWS’s economic analysis.

First, Arizona Cattle suggests that the FWS’s analy-

sis ignored the economic effects of designating unoc-

cupied habitat. Having already rejected’ this

argument’s premise—that the FWS'’s critical habitat

designation included unoccupied habitat—-we need

give »o further consideration to this argument. Se-

eond, Arizona Cattle asserts that the FWS’s economic

ysis ignored the difference between the jeopardy

and adverse modification standard in light of Gifford

Pinchot, and should have considered the economic

impacts of additional consultations and project. modi-

fications that the adverse modification standard

imposes. Arizona Cattle did not make this argument

at the district court level and we therefore do not

consider it now.'° See Solis v. Matheson, 563 F.3d 425,

‘Although we need not reach it, we note that this argu-

ment appears fundamentally inconsistent with Arizona Cattle’s

(Continued on following page)

App. 34

437 (9th Cir. 2009); Harger v. Dep’t of Labor, 569 F.3d

898, 904 n.9 (9th Cir. 2009).

Vv. CONCLUSION

We find no fault with the FWS’s designation of

habitat for the Mexican Spotted Owl. The FWS did

not impermissibly treat unoccupied areas as “occu-

pied,” and we hold that it permissibly applied the

baseline approach in analyzing the economic impact

of the critical habitat designation.

The judgment of the district court is AF-

FIRMED.

primary complaint regarding the FWS’s application of the

baseline approach. The baseline approach counts precisely these

economic impacts and Arizona Cattle’s disagreement with the

baseline approach is, in fact, that it counts only impacts like

these.

App. 35

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Center for

Biological Diversity,

Arizona Cattle ) No.

Growers’ Association, ) 06-CV-1744-PHX-SRB

Plaintiff, | OPINION AND ORDER

VS. ) (Filed Feb. 4, 2008)

Dirk Kempthorne, et al., ?

)

Defendants, )

and )

)

Intervenor-Defendant.

This matter arises out of the United States

Department of the Interior and its Fish and Wildlife

Service's (collectively the “Service”) promulgation of

the Final Designation of Critical Habitat for the

Mexican Spotted Owl, 69 Fed. Reg. 53,182 (Aug. 31,

2004), under the Endangered Species Act (“ESA”), 16

U.S.C. § 1531, et seg. At issue are Plaintiff Arizona

Cattle Growers’ Association’s Motion for Summary

Judgment (Doc. 37), Defendants Dirk Kempthorne, et

al.’s Cross Motion for Summary Judgment (Doc. 44),

and Intervenor-Defendant Center for Biological

Diversity’s (“CBD”) Motion for Summary Judgment

(Doc. 45).

App. 36

I. BACKGROUND

A. Procedural History

The events that precipitated this litigation began

on December 22, 1989, when Dr. Robin D. Silver

submitted a petition requesting that the Service

consider listing the Mexican Spotted Owl (Strix

occidentalis lucida) (the “Owl”) as a threatened or

endangered species under the ESA. Final Rule to List

the Mexican Spotted Owl as a Threatened Species, 58

Fed. Reg. 14,248, 14,252 (March 16, 1993); Ctr. for

Biological Diversity v. Norton, 240 F. Supp. 2d 1090,

1091 (D. Ariz. 2003). Almost four years later, on

March 16, 1993, the Service issued the final rule

listing the Owl as a threatened species. 58 Fed. Reg.

at 14,248. At the time of listing, the Service opined

that “[dJesignation of critical habitat is prudent, but

not determinable at this time.” /d.

In addition to vesting the Service with listing

responsibilities, Congress has directed it to determine

those areas that constitute critical habitat for listed

species. 16 U.S.C. § 1533(a)(3). The Service must, “to

the maximum extent prudent and determinable,”

designate critical habitat concurrent with the listing

of any species as threatened or endangered. Id. If

critical habitat is not determinable at the time of

listing, then the Service “may extend the one-year

period ... by not more than one additional year.” /d.

§ 1533(b)6C)a1). By February of 1994 the Service

had yet to propose a rule designating critical habitat

App. 37

for the Owl, so a group of concerned citizens and

environmental organizations filed suit to compel

the Service to designate the Owl’s critical habitat.

Silver v. Babbitt, 94-CV-337-PHX-RGS; Norton, 240

F. Supp. 2d at 1092. The court responded by ordering

the Service to designate critical habitat in a final rule

to be published no later than May 30, 1995. Id. On

June 6, 1995, the Service designated 4.6 million acres

of critical Owl habitat. Final Rule Designating Criti-

cal Habitat for the Mexican Spotted Owl, 60 Fed. Reg.

29,914.

Shortly after publication, the Owl’s critical

habitat designation was challenged in Coalition of

Arizona/New Mexico Counties for Stable Economic

Growth v. U.S. Fish and Wildlife Service, CV-95-1258-

M (D.N.M. 1997), for failure to complete the review

required by the National Environmental Policy

Act, 42 U.S.C. § 4321, et seg. (“NEPA”).' The court

‘The Tenth Circuit has held that NEPA compliance is

required prior to critical habitat designation, however, this

position has not been adopted in the Ninth Circuit. See Catron

County Bd. of Comm'rs, N.M. v. U.S. Fish and Wildlife Serv., 75

F.3d 1429, 1435-36 (10th Cir. 1996); but see Home Builders Ass’n

of N. Cal. v. U.S. Fish and Wildlife Serv., 268 F. Supp. 2d 1197,

1233 (E.D. Cal. 2003) (“Home Builders I”) (citing Douglas

County v. Babbitt, 48 F.3d 1495, 1507 (9th Cir. 1995)) (rejecting

Catron and quoting Douglas County for its holding that “NEPA

does not apply to the Secretary’s decision to designate a habitat

for an endangered or threatened species under the ESA”); see

also Revocation of Critical Habitat for the Mexican Spotted Owl,

63 Fed. Reg. at 14,378-79.

App. 38

enjoined the Service from enforcing the critical habi-

tat designation until completion of a NEPA review,

leading the Service to revoke the critical habitat

designation for the Owl on March 25, 1998. 63 Fed.

Reg. 14,378; Norton, 240 F. Supp. 2d at 1092. Follow-

ing the revocation, when no new proposed rule desig-

nating the Owl’s critical habitat had yet been

published, a new lawsuit was filed asking the United

States District Court for the District of New Mexico

to order the Service into action. Proposed Designation

of Critical Habitat for the Mexican Spotted Owl, 65

Fed. Reg. 45,336, 45,339 (citing Sw. Center for Biolog-

ical Diversity and Silver v. Babbitt and Clark, CIV

99-519 LFG/LCS-ACE (D.N.M. 2000)); Norton, 240

F. Supp. 2d at 1092. While recognizing that it was in

violation of the ESA, the Service requested still more

time for publication of the proposed and final rules.

Norton, 240 F. Supp. 2d at 1092. These requests were

denied and, on February 1, 2001, the service pub-

lished a final rule designating 4.6 million acres of

critical habitat. Final Designation of Critical Habitat

for the Mexican Spotted Ow!, 66 Fed. Reg. 8,530.

On August 27, 2001, the Center for Biological

Diversity filed suit alleging that the Service’s decision

to designate roughly 4.6 of the proposed 13.5 million

acres, and to exclude all National Forest Service lands,

was in violation of the ESA and the Administrative

Procedure Act (“APA”). Norton, 240 F. Supp. 2d at

1109. The court agreed and, on January 13, 2003,

ordered the Service to publish a revised proposed

App. 39

order within three months with a final order due

following an additional three month period. Jd. The

Service then sought, and the court begrudgingly

granted, an extension of these deadlines, although

not to the extent that the Service requested. Center

for Biological Diversity v. Norton, 2003 WL 22849594,

*1 (D. Ariz. Feb. 19, 2003). On August 31, 2004 the

Service published the Final Rule designating critical

habitat, which is now challenged by Plaintiff. 69 Fed.

Reg. at 53,182.

B. The ESA and Critical Habitat Designa-

tion

The ESA was enacted to, among other things,

“provide a means whereby the ecosystems upon which

endangered species and threatened species depend

may be conserved.” 16 U.S.C. § 1531(b). To further

this policy, Congress directed the Secretaries of

Commerce and the Interior to list threatened and

endangered species and designate their critical

habitats. Jd. § 1532(15). ESA listing and critical

habitat designation responsibilities for animals such

as the Owl have been further delegated to the Ser-

vice.

Critical habitat is defined as:

(i) the specific areas within the geo-

graphical area occupied by the species, at the

time it is listed in accordance with the provi-

sions of section 1533 of this title, on which

App. 40

are found those physical or biological fea-

tures (1) essential to the conservation of the

species and (II) which may require special

management considerations or protection;

and

(ii) specific areas outside the geograph

ical area occupied by the species at the time

it is listed in accordance with the provisions

of section 1533 of this title, upon a determi-

nation by the Secretary that such areas are

essential for the conservation of the species

Id. § 1532(5) A). The Service must designate critical

habitat “on the basis of the best scientific data avail

able and after taking into consideration the economic

impact” of the designation. /d. § 1533(b)(2)

C. Plaintiff’s Challenge to the August 31,

2004 Critical Habitat Designation

At present the Service has designated approxi

mately 8.6 million acres of federal land as critical Ow!

habitat including canyon and forest land in Arizona,

New Mexico, Colorado, and Utah. 69 Fed. Reg. at

53,182. Plaintiff challenges the legality of this critical

habitat designation on the following grounds: (1) the

Service failed to identify the “physical or biological

features ... essential to the conservation of the

species”; (2) the Service failed to determine at what

point the Owl will be conserved, and thus cannot

identify the features essential to that end; (3) the

Service unlawfully designated areas not occupied by

the Owl as occupied critical habitat; (4) the Service

App. 41

failed to determine which areas contain the “physical

or biological features ... essential to the conservation

of the species” and thus designated areas as critical

habitat that are missing one or more of the essential

features; (5) the Service improperly included as

critical habitat areas without first determining

whether they “may require special management

considerations or protection”; (6) the Service did not

designate Owl critical habitat using the best scientific

data available; and (7) the Service failed to properly

take into account the economic impacts of specifying

the area as critical habitat.

In its Motion for Summary Judgment, Plaintiff

asks the Court to set aside the Final Rule and re

mand to the Service. Defendants and Intervenor

respond that the Service complied with both the ESA

and the APA in promulgating the critical habitat

designation, and thus no grounds exist for invalidat

ing the Final Rule. In addition, they argue that even

if the Court were to find that the Service was not in

complete compliance with the statutory require

ments, the Final Rule should remain in effect pend

ing any remand.

The Court, having considered the Cross-Motions

for Summary Judgment, Intervenor’s Brief, and the

oral argument made to the Court, now turns to

address each of Plaintiff's arguments

App. 42

Il. LEGAL STANDARDS AND ANALYSIS

Summary judgment is appropriately granted

when there are no genuine issues of material fact,

and the moving party is entitled to judgment as a

matter of law. Fed. R. Civ. P. 56(c). When the district

court reviews an administrative agency decision

under the Administrative Procedure Act (“APA”),

“summary judgment is an appropriate mechanism for

deciding the legal question of whether the agency

could reasonably have found the facts as it did.”

Occidental Eng’g Co. v. INS, 753 F.2d 766, 770 (9th

Cir.1985); City & County of San Francisco v. United

States, 130 F.3d 873, 877 (9th Cir. 1997). “|'Tijhe

function of the district court is to determine whether

or not as a matier of law the evidence in the adminis-

trative record permitted the agency to make the

decision it did.” Occidental Eng'g, 753 F.2d at 769.

The APA, 5 U.S.C. § 706, governs judicial review

of agency decisions under the ESA. Native Ecosystems

Council v. Dombeck, 304 F.3d 886, 901 (9th Cir. 2002).

Section 706 states that a court “shall hold unlawful

and set aside agency actions ... found to be arbitrary,

capricious, an abuse of discretion, or otherwise not in

accordance with law.” 5 U.S.C. § 706(2): see also Sw.

Ctr. for Biological Diversity v. U.S. Forest Serv., 307

F.3d 964, 975 (9th Cir. 2002). “This deferential stand-

ard ensures that the agency decision contains no

clear error of judgment.” Natl Ass’n of Home Builders

v. Norton, 340 F.3d 835, 841 (9th Cir. 2003) (citation

omitted). The court presumes regulations to be valid,

but the inquiry into their validity is a “thorough,

App. 43

probing, in-depth review.” Citizens to Preserve Over

ton Park v. Volpe, 401 U.S. 402, 415 (1971).

Under the arbitrary and capricious standard, the

court must decide whether the Service “considered

the relevant factors and articulated a rational con-

nection between the facts found and the choice made.”

Baltimore Gas & Elec. Co. v. Natural Res. Def. Coun-

cil, 462 U.S. 87, 105 (1983). The court must reverse

an agency action when the agency has “‘relied on

factors which Congress has not intended it to consid-

er, entirely failed to consider an important aspect of

the problem, offered an explanation for its decision

that runs counter to the evidence before the agency,

or is so implausible that it could not be ascribed to a

difference in view or the product of agency exper-

tise.’” Pac. Coast Fed’n of Fishermen’s Ass’ns, Inc. v.

Nat'l Marine Fisheries Serv., 265 F.3d 1028, 1034 (9th

Cir. 2001) (quoting Motor Vehicle Mfrs. Ass’n v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).

Critical habitat designated under the ESA may also

be invalid if it is determined that the Service either

failed to use the “best scientific data available” or

that it failed to “consider| ] the economic impact, and

any other relevant impact, of specifying any particu-

lar area as critical habitat.” 16 U.S.C. § 1533(b)(2).

The court’s decision must be based on the administra-

tive record, and “the basis for the agency’s decision

must come from the record.” Natl Ass’n of Home

Builders, 340 F.3d at 841 (citing Ariz. Cattle Growers’

Ass'n v. U.S. Fish & Wildlife Serv., 273 F.3d 1229,

1236 (9th Cir. 2001)). The court “cannot substitute

fits] judgment for that of the agency.” Id.

App. 44

A. Identification of Essential Physical or

Biological Features

In defining critical habitat, 16 U.S.C § 1532(5)(A)

differentiates between habitat that is “occupied” and

habitat that is not “occupied.” For “area[s] occupied

by the species,” critical habitat is limited to areas

containing “physical or biological features (1) essen-

tial to the conservation of the species and (I1) which

may require special management consideration or

protection.” 16 U.S.C § 1532(5)(A). Thus, to satisfy

part one of the statutory definition of occupied critical

habitat, the Service must identify the “physical or

biological features essential to the conservation of the

[Owl].” Jd. Plaintiff contends that these features, also

known as primary constituent elements (“PCEs”), are

inadequately described in the critical habitat desig-

nation, and, therefore, violate the LSA.

The Owl’s critical habitat designation identifies

three categories of PCEs: (1) forest structure; (2)

maintenance of adequate prey species; and (3) canyon

habitat. 69 ed. Reg. at 53,211. The PCEs for the Owl

are as follows:

A. |PCEs] related to forest structure:

(1) a range of tree species, including mixed

conifer, pine-oak, and riparian forest types,

composed of different tree sizes reflecting dif-

ferent ages of trees, 30 percent to 45 percent

of which are large trees with a trunk diame-

ter of 12 inches (0.03 inches [sic]) or more

when measured at 4.5 feet (1.4 meters) from

the ground;

App. AD

(2) a shade canopy created by the tree

branches covering 40 percent or more of the

ground; and

(3) large dead trees (snags) with a trunk

diameter of at least 12 inches (0.3 meters)

when measured at 4.5 feet (1.4 meters) from

the ground.

B. |PCEs] related to maintenance of ade

quate prey species:

(1) High volumes of fallen trees and other

woody debris;

(2) A wide range of tree and plant species,

including hardwoods; and

(3) Adequate levels of residual plant cover

to maintain fruits, seeds, and allow plant re

generation.

C. [PCEs] related to canyon habitat include

one or more of the following:

(1) presence of water (often providing cooler

and often higher humidity than the sur

rounding areas);

(2) clumps or stringers of mixed-conifer,

pine-oak, pinyon-juniper, and/or riparian

vegetation;

(3) canyon wall containing crevices, ledges,

or caves; and

(4) high percent of ground litter and woody

debris.

App. 46

Id. Plaintiff argues that the “ESA by its very terms

requires some minimal degree of specificity [in defin-

ing PCKEs] which, in this case, has not been met.”

(Pl.’s Combined Opp’n and Reply to Defs. and Def.-

Intervenor’s Cross-Mots. for Summ. J. (“Pl.’s Reply”)

at 4.) Chief among Plaintiffs concerns is the “vague-

ness |that] abounds with the descriptions of the

PCEs” which it claims fails to “put the public on

adequate notice as to the PCEs.” (Pl.’s Mem. of P. & A.

in Supp. of Mot. fer Summ. J. (“Pl.’s Mot.”) at 9-10.)

To support this claim, Plaintiff inighhghts that “the

Service does not provide a definitive list of qualifying

trees”; that it uses vague terms including “high

volumes,” “wide range,” and “adequate”; and that it

uses generalized statements such as, “high percent of

ground litter and woody debris.” (Pl.’s Mot. at 9.) In

response to Plaintiff’s arguments, the Service con-

tends that it used the best available science to arrive

at the PCKEs, and that this is all that the ESA re-

quires.

If the Service were to set forth PCEs so utterly

lacking in detail as to be facially deficient, then any

critical habitat designation made in reliance on those

PCEs would certainly fail to meet § 1532(5)(A)’s

requirements for the simple reason that one cannot

ascertain the physical or biological features essential

to a species’s conservation without first identifying

those features with some minimal specificity. Indeed,

where the Service has designated critical habitat

without providing a sufficiently detailed description

of the PCEs, at least one court has concluded that

such a designation is arbitrary and capricious. See

App. 47

Home Builders 1, 268 F. Supp. 2d at 1211-13. In Home

Builders I the court determined that the Service had

essentially neglected to provide any meaningful

description of the PCEs in the final rule designating

critical habitat for the Alameda whipsnake. 7d. at

1211. The Service's attempt to detail the PCEs for the

whipsnake included unhelpful “sentences indicating

that the |PCEs| ‘are in’ or ‘may be found in’ particular

areas, or that particular habitat features ‘may also

contain’ the elements,” and generalizations such as:

“a suitable range of temperatures,” “sufficient” “corri-

dors of plant cover,” and “adequate insect popula-

tions.” 7d. at 1211-18. Fatal to the whipsnake habitat

designation was that, “[njone of these sentences tell

the reader what the primary constituent elements

actually are.” /d. Plaintiff’s attempt to draw parallels

between the whipsnake PCEs and those specified for

the Owl falls short of convincing the Court that the

present Final Rule approaches the Service’s failures

identified in Hlome Builders 1. While the Service may

not have provided PCEs to a level of specificity suffi-

cient to appease Plaintiff, it did satisfy its statutory

obligation with the level of detail given in the Final

Rule—and that is all the ESA requires.

To counter Plaintiff’s reliance on Home Builders

[, Defendants cite to a similar case, also from

the Eastern District of California, Home Builders

Association of Northern California v. United States

Fish and Wildlife Service, 2006 WI. 3190518 (E.D.

Cal. Nov. 2, 2006) (“Home Builders II”), modified on

other grounds by 2007 WL 201248 (E.D. Cal. Jan. 24,

2007), in support of their position that the PCEs were

App. 48

set forth with the requisite level of specificity. The

Home Builders [I] court addressed a challenge to the

critical habitat designation for fifteen vernal pool

species, ultimately concluding that the designation

complied with the strictures of the ESA. 2006 WL

3190518, at *1. Similar to the arguments advanced by

Plaintiff, the vernal pool species’ PCEs were chal-

lenged for, among other things, lack of specificity. 7d.

at *16. Notably, the plaintiff argued that “there is no

indication of the size of the uplands or the mounds or

swales they contain, and no explanation of what kind

of food in the form of detritus would be acceptable.”

ld. The court rejected these arguments, writing that

“Home Builders do not reference scientific data with

regard to the species or PCEs in this case that the

FWS should have considered and disregarded.” Id.

The Home Builders IT court, in rejecting the plain-

uiff’s argument, jumped directly into an analysis that

examined whether the PCEs were supported by the

best scientific data available, without first assessing

whether the PCEs met some sort of baseline level of

reasonable specificity. Jd. Plaintiff, in its Reply,

challenges Defendants’ reliance on Home Builders II by

finding error in the court’s decision to proceed without

making this preliminary determination. Plaintiff

contends that the “court did not apprehend that the

challenge to the vernal pool species’ PCEs—like the

challenge to the [O]wl’s PCEs—is independent of the

record because the ESA by its very terms requires

some minimal degree of specificity which, in this case,

has not been met.” (Pl.’s Reply (citing Home Builders

I, 268 F. Supp. 2d at 1213).) Clearly there is some

minimal level of specificity required—the Service may

App. 49

not write an absurdly brief set of PCEs for a species

and then rely on an argument that the PCEs are

supported by the best available science. However,

that level of specificity was reached in this case, just

as it was in Home Builders IIT. Thus, the Home Build-

ers ll court’s decision to limit its analysis to a review

of the Service’s compliance with the best available

science standard was appropriate, a finding that is

consistent with the holding of Home Builders I, which

involved a set of PCEs patently less detailed.

Further undermining Plaintiff’s argument is the

clear indication from the Home Builders I court that

ii was more concerned with the Service's failure to

explicitly describe the physical or biological features

as being essential to the whipsnake’s conservation

than it was with the PCEs’ lack of specificity. Hom

Builders I, 268 ¥F. Supp. 2d at 1211, 1213. The Home

Builders I! court emphasized this distinction, writing

“[mJore significant, however, is the fact that Defend-

ants do not provide a citation to any part of the Final

Rule in which the Service identifies these four envi-

ronments as essential for the conservation of the

species.” Jd. at 1211. Later in its analysis, the court

again uses this rationale to discredit what it charac-

terized as “[tjhe most definitive statement” provided

in the list of whipsnake PCEs. Jd. at 1213. Disregard-

ing whether the description of these “definitive”

features may have been sufficiently detailed, the

court instead highlighted that the features were

introduced by a phrase stating that they are “specific

habitat features needed by whipsnakes.” Id. at 1213.

The court contrasted this with the Service’s repeated

App. 50

use of the term “essential” in other parts of the PCEs

section of the rule and opined “that it is unclear

whether the term ‘need’ used in this context is meant

to be synonymous with the term ‘essential.’” Id. The

whipsnake PCEs were invalidated primarily because of

the Service’s inability to unequivocally state that they

were in fact “essential to the conservation of the spe-

cies” as required by the ESA. 16 U.S.C. § 1532(5)(A)Q).

Thus, Plaintiff’s reliance on Home Builders I as evi-

dence that PCEs have in the past been held to some

threshold standard is substantially undercut.

In responding to Plaintiff, Defendants and

Intervenor, in large part, rely on two simple argu-

ments: the ESA does not require the level of specifici-

ty demanded by Plaintiff, and the Service used the best

available science to set forth the PCEs. The Court

agrees with these statements. Both § 1532(5)(A) and 50

C.F-R. § 424.12 undoubtedly require that the Service

use some level of specificity in enumerating PCEKs—to

hold otherwise would eviscerate the definition of

critical habitat, as PCEs constitute an essential compo-

nent of occupied critical habitat and their existence is

dispositive to any determination. No statute or regula-

tion provides a formula for the Service to use in

setting forth PCEs. Instead, the relevant federal

regulation states that “[p]rimary constituent elements

may include, but are not limited to, the following: roost

sites, nesting grounds, spawning sites, feeding sites,

seasonal wetland or dryland, water quality or quanti-

ty, host species or plant pollinator, geological for-

mation, vegetation type, tide, and specific soil types.” 50

C.F.R. § 424.12(b\5) (emphasis added). The PCEs

App. 51

detailed by the Service address many of the catego-

ries contemplated by the regulation. For instance,

“canyon habitat is used by owls for nesting, roosting,

and foraging”; Owl “[b]reeding sites are located below

canyon rims”; feeding sites include “canyon bottoms,

on cliff faces and benches, and along canyon rims and

adjacent lands”; geological features include “canyon

wall containing crevices, ledges, or caves”; and vege-

tation is varied but specifies “mixed-conifer, pine-oak,

pinyon-juniper,” “hardwoods,” and “residual plant

cover to maintain fruits |and]| seeds.” 69 Fed. Reg. at

53,211.

Here the record does not support Plaintiff’s

argument that the PCEs are so vague as to make it

unnecessarily difficult for the public to ascertain

whether certain plots of land contain the Owl’s PCEs.

While certain terms used in the critical habitat

designation, including those emphasized by Plaintiff,

may, when viewed in isolation, be lacking in the

requisite specificity, they are accompanied by other

more detailed terms that, when taken together, are

reasonably specific and identify the physical or bio-

logical features essential for the Owl’s conservation.

For example, the Service used the following descrip-

tion as one attribute related to forest structure: “large

dead trees (snags) with a trunk diameter of at least

12 inches (0.3 meters) when measured at 4.5 feet (1.4

meters) from the ground.” Jd. This statement, and

others like it, are evidence that the Service has

endeavored to provide PCEs within a reasonable level

of specificity. Given the deference that this Court

App. 52

must accord the Service’s decisions, the Court con-

cludes that the PCEs are facially sufficient.

With the conclusion that the PCEs contain the

minimum level of specificity requisite to surmount

this preliminary hurdle, the Court now inquires

whether the PCEs are supported by the best available

science—the position repeatedly taken by Defendants

and Intervenor. Defendants argue that “the critical

habitat designation is sufficiently detailed” and that

“(t]he level of detail the Plaintiff would like is incon

sistent with the biological reality of the habitat

requirements for the owl and the best available

science.” (Defs.’ Summ. J. Reply (“Defs.’ Reply”) at 2.)

Tellingly, Plaintiff does not argue that the Service’s

PCEs are based on incorrect data or suspect science.

In fact, Plaintiff had the opportunity to submit com-

ments challenging the Service’s choice of PCEs, and

the science upon which they are based, and even to

suggest alternative scientific evidence for considera-

tion. Neither Plaintiff nor any other interested party

submitted such a comment. 69 Fed. Reg. at 53,185

(noting that “|dluring the comment periods, we re-

quested, but did not receive, any information regard-

ing refinements to the [PCEs|.”). Furthermore,

Plaintiff conceded in the briefing that it “does not

contend that the Service failed to use the best availa-

ble scientific data in identifying the owl’s PCEs.” (PI.’s

Reply at 3.) The Court will not investigate whether

the PCEs were based upon sound scientific record

evidence as Plaintiff has failed to illuminate any

contradictory evidence or even call into question any

of the evidence cited by the Service as supporting the

App. 53

PCEs.*° Thus, the Court concludes that the PCEs meet

the statutory criteria of the ESA.

“Plaintiff argues that the Service has impermissibly shifted

the establishment of quantitative reference points for the Owl

PCEs to the Section 7 consultation process which, Plaintiff

claims, “is not permissible, because the agency has the obliga-

tion to put the public on adequate notice as to the PCEs that

support critical habitat designation.” (Pl.’s Mot. at 10.) The

Court disagrees. The Service’s first priority is to administer

those portions of the ESA that are within its purview in a

manner consistent with Congressional intent—an obligation

that outweighs Plaintiffs concerns. That intent was concisely

stated by the Supreme Court in Tennessee Valley Authority v.

Hill, 437 U.S. 153, 174 (1978), where it wrote, “Congress intend

ed endangered species to be afforded the highest of priorities.”

This position is further supported by the legislative history of

the 1979 amendments to the ESA indicating that during Sec-

tion 7 consultations, species should be “give[n} the benefit of the

doubt.” H.R. Rep. No. 96-697, at 12 (1979) (Conf. Rep.), as re-

printed in 1979 U.S.C.C.A.N. 2572, 2576. While not specifically

targeted at the PCE listing process, these comments evidence a

preference when administering the ESA towards making

decisions that will assist in conserving the species, even when

there arguably could have been a more precise determination

given additional resources.

Clearly it would be preferable to provide the greatest level

of specificity in all PCEs, thereby reducing reliance on Section 7

consultations. However, the Service’s ability to provide such

detail is tempered by the statutory command that critical

habitat be designated at the time of listing, or, when necessary,

no later than one year following the listing date. See 16 U.S.C.

§ 1533(b)6)(C). When balancing the demands of timely critical

habitat designation versus scientific precision, the Court is

mindful of the fact that the ESA’s rigid critical habitat designa-

tion timeline is an important part of achieving the stated

purpose of “providling] a means whereby the ecosystems upon

(Continued on following page)

App. 54

B. Identification of the Point at Which

the Owl will be Deemed Conserved

Conservation, as defined in the ESA, occurs when

a listed species is brought “to the point at which the

measures provided pursuant to this chapter are no

longer necessary.” 16 U.S.C. § 1532(3). The ESA

defines occupied critical habitat, in part, as the areas

containing “those physical or biological features

essential to the conservation of the species.” 16 U.S.C.

§ 1532(5)(A)G). Plaintiff latches on to the phrase

“essential to the conservation” and, from this, argues

that it is impossible to know what features are essen-

tial to Ow! conservation without first identifying at

what point that ultimate goal will be attained. In

which endangered species and threatened species depend may

be conserved.” Jd. § 1531(b).

Using the best available science, the Service was unable to

provide the quantitative reference puints desired by Plaintiff,

and instead advised in the Final Rule that some “quantitative

estimates (e.g., basal area, canopy closure, etc.)” would be best

established “through consultation.” 69 Fed. Reg. at 53,211. There

is no statutory command that the Service provide exhaustive notice

to the public concerning all PCEs. Conversely, the ESA explicitly

requires the expeditious designation of critical habitat using the

best available science. 16 U.S.C. §§ 1533(b)6\NC), 1533(b)(2). In

weighing the need to inform the public versus the Service's critica]

habitat designation duties, the Court concludes that delaying the

specification of some quantitative aspects of the PCEs until

consultation is permissible—especially where, as here, there is

no private land included in the critica] habitat designation and,

thus, all land use decisions (e.g., grazing permits) will likely

already involve the participation of agency biologists. (See Mem.

in Supp. of Defs.’ Cross-Mot. for Summ. J. and Opp’n to PI.’s

Mot. for Summ. J. (“Defs.’Mot.”) at 12.)

App. 55

support of this argument, Plaintiff relies on the

reasoning of the Home Builders I court which held

that, “if the Service has not determined at what point

the protections of the ESA will no longer be necessary

for the snake, it cannot possibly identify the physical

or biological features that are an indispensable part

of bringing the snake to that point.” 268 F. Supp. 2d

at 1214.

While tempting in its logical simplicity, the Court

is unconvinced that one cannot move forward with a

conservation effort without first identifying that

precise point at which conservation will be achieved.

Furthermore, as highlighted by the Home Builders I]

court, the logic used in Home Builders I cited no

caselaw and was based not on an examination of the

overall statutory scheme, but instead on logical

supposition. This Court takes an approach, and

reaches a conclusion, identical to that reached in

Home Builders II: that the language of the ESA

requires a point of conservation to be determined in

the recovery plan, not at the time of critical habitat

designation.

‘Development and implementation of a recovery plan for

each listed species is mandated by the ESA in all instances

except where “such a plan will not promote the conservation of

the species.” 16 U.S.C. § 1533(f)(1). Unlike critical habitat

designations, no time frame has been established for the prom

ulgation of recovery plans. Jd. In determining how to allocate

resources towards recovery planning, the ESA requires that the

Service “give priority to those endangered species or threatened

(Continued on following page)

App. 56

A fundamental rule of statutory construction is

“that a negative inference may be drawn from the

exclusion of language from one statutory provision

that is included in other provisions of the same

statute.” Hamdan v. Rumsfeld, 126 S. Ct. 2749, 2766-

67 (2006) (citing Russello v. United States, 464 U.S.

16, 23 (1983) (“‘{Wjhere Congress includes particular

language in one section of a statute but omits it in

anotiier section of the sa

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