Revitalizing critical habitat: the Ninth Circuit's pro-efficiency approach.

• Author: Farewell, Dashiell
• Position: 2015 Ninth Circuit Environmental Review

1. INTRODUCTION II. Critical Habitat Designations: Background and Importance A. Statutory Mechanics: How the Services (Should) Designate Critical Habitat B. Legislative History C. Why Critical Habitat Designations Matter D. The Services Have Not Adequately Designated Critical Habitat III. Bear Valley and Building Industry. The Ninth Circuit's Affirmation of Discretionary and Efficient Critical Habitat Designations A. National Environmental Policy Act B. Cooperation with State and Local Authorities C. Cost-Benefit Analysis IV. Conclusion I. INTRODUCTION

   The Endangered Species Act of 1973 (ESA) (1) passed into law in a time of sudden enlightenment. In the late 1960s and early 1970s, Americans awoke to the bleak reality of environmental devastation occurring across the country, the result of unchecked degradation of the air, land, and water spurred by the industrial boom of the previous several decades. Congress moved swiftly to combat this threat, passing within eleven years nearly all of the foundational environmental statutes that guide environmental decision making today. (2) While Congress primarily focused on protecting and restoring natural resources, (3) it also recognized that plants and animals were disappearing at alarming rates, and that mass extinction loomed in the not-too-distant future. (4) Congress realized that the damage done to these imperiled species would be irreparable if left unchecked, (5) and so the ESA was born. Frequently referred to as the "pit bull" of environmental law, (6) the ESA not only protects endangered species from extinction, but also aims to pull those species back from the brink of extinction and to the point where they once again thrive. (7) Most profoundly of all, the ESA mandates the preservation of endangered species no matter the cost. (8) The threat of extinction has the potential to bring multimillion dollar projects to a grinding halt, render prime real estate undevelopable, and potentially elevate the life of the most humble and unassuming creatures above all other considerations. (9)

   Protection under the ESA begins with a "listing" decision, which designates a species as either "threatened" or "endangered." (10) The United States Fish and Wildlife Service (FWS) and the National Marine Fishery Service (NMFS) (collectively, the Services) coadminister the ESA and make listing decisions for species placed under their respective jurisdictions. (11) Once listed, species receive a host of protections, including for habitat. (12) In fact, the ESA places a premium on preserving habitat, such that the first stated "purpose" is to "provide a means whereby the ecosystems upon which endangered and threatened species depend may be conserved." (13) To that end, the ESA contemplates that listing will, with few exceptions, result in a concurrent designation of "critical habitat." (14) However, for many years, the critical habitat provision has been given short shrift, and many listed species have not received the extra protections provided by designation. (15) That trend is starting to swing in the other direction, (16) but comprehensive designation and protection of critical habitat remains elusive. (17)

   With two back-to-back decisions issued in the summer of 2015, the United States Court of Appeals for the Ninth Circuit expanded the Services' discretionary authority to designate critical habitat in an efficient and straightforward manner. In Bear Valley Mutual Water Co. v. Jewell (Bear Valley), (18) the court upheld FWS's decision to designate critical habitat for the Santa Ana Sucker, an endangered species of freshwater fish, in California's Santa Ana River despite vociferous opposition from municipalities and water districts within the affected area. (19) The appellants, local water management authorities, charged that FWS failed to cooperate with state and local authorities regarding water resource concerns prior to designating the habitat, despite a "policy" within the ESA indicating a congressional preference for such cooperation. (20) The appellants also argued that FWS failed to comply with the National Environmental Policy Act (NEPA) (21) by declining to prepare an Environmental Impact Statement (EIS) prior to designating habitat for the sucker. (22) The Ninth Circuit rebuffed these complaints, holding that FWS had fully complied with its statutory responsibilities. (23) Then, in Building Industry Ass'n of the Bay Area v U.S. Department of Commerce (Building Industry) (24) the Ninth Circuit built off of the foundation laid in Bear Valley to further expand the Services' discretionary authority to designate habitat. (25) In that case, several home-development industry groups sued NMFS for designating critical habitat for the green sturgeon within California's Sacramento-San Joaquin Delta and the Sacramento River Basin without adequately weighing the adverse economic impacts of the designation against the benefits to species recovery. (26) The Ninth Circuit determined, however, that the ESA did not mandate a strict cost-benefit analysis (CBA), and held that NMFS had adequately considered cost prior to designating the habitat. (27)

   This Chapter explores three important holdings within those Ninth Circuit decisions. First, the Ninth Circuit reaffirmed Douglas County v Babbitt, (28) in which the Ninth Circuit held that the Services do not need to comply with NEPA when designating critical habitat. (29) Douglas County, the court explained that critical habitat designations do not impact the environment as understood under NEPA. (30) Despite a circuit split over the question, (31) the Ninth Circuit in Bear Valley refused to overturn its earlier holding and continued to insulate critical habitat designations from the NEPA process. (32) This holding will enable the Services to avoid the time and expense of adequate NEPA compliance, thus making critical habitat designations faster and more affordable.

   Second, the Ninth Circuit determined that the Services have no independent substantive duty to "cooperate" with state and local authorities to resolve water resource concerns when designating critical habitat. (33) While the ESA includes a congressional policy that the Services should cooperate with local authorities to resolve water resource concerns, (34) the court concluded that the policy was inoperative because Congress chose not to supplement the policy with substantive mandates. (35) Instead, the court held that the Services acted in accordance with the policy by following the general procedures regarding notice to local authorities included elsewhere in the ESA. (36) This holding will allow the Services to exercise more discretion when designating habitat and will ensure that antagonistic local authorities cannot derail the designation process by arguing that the Services failed to cooperate sufficiently.

   Finally, the Ninth Circuit rejected the argument that the Services must engage in strict CBA prior to designating critical habitat. (37) The court explained that the Services must look at cost as an element in their designation decisions, but are never legally required to exclude habitat from designation even when the economic impacts of designation may be high. (38) Strict CBA is an expensive and time-consuming endeavor, the results of which would almost certainly favor the quantifiable "cost" of designation over the more intangible "benefit" of protecting habitat. Unconstrained by strict CBA, the Services can take a fuller range of values and priorities into account when designating critical habitat.

   In Bear Valley and Building Industry the Ninth Circuit provided the Services with meaningful leeway to more efficiently and affordably designate critical habitat. The two cases discussed in this Chapter should encourage the Services to proactively designate critical habitat in order to better effectuate the recovery of all listed species, and should allow the Services to fulfill their statutory obligations faster and more affordably than under the more onerous regulatory schemes advanced by designation opponents. By explicitly freeing the Services from various administrative constraints, the Ninth Circuit finessed a key component of the ESA into a more workable, and therefore more powerful, tool for species recovery.

   Part II of this Chapter provides background on the application and importance of critical habitat designations under the ESA. Part III explores the Ninth Circuit's holdings in Building Industry and Bear Valley, discussing how those decisions allow the Services to designate critical habitat in a more efficient and discretionary manner.

2. CRITICAL HABITAT DESIGNATIONS: BACKGROUND AND IMPORTANCE

   1. Statutory Mechanics: How the Services (Should) Designate Critical Habitat

      The ESA is in no small part built upon a recognition that habitat destruction is one of the most significant causes of species extinction worldwide. (39) An emphasis on preserving habitat permeates the ESA, beginning with an explicit assertion that the ESA serves as an instrument by which "the ecosystems upon which endangered species and threatened species depend may be conserved." (40) An essential tool in achieving that goal is the designation and conservation of critical habitat. The ESA defines critical habitat as "specific areas within the geographical area occupied by the species ... on which are found those physical or biological features (1) essential to the conservation of the species, and (II) which may require special management considerations or protection." (41) Critical habitat is habitat that a species needs to both survive and to recover, which is the ESA's ultimate goal. (42) The ESA anticipates that, in nearly all cases, the Services will designate critical habitat at the same time a species is listed. (43) The Services should designate critical habitat "to the maximum extent prudent and determinable," (44) and it is imprudent only if "[t]he species is threatened by...