Home on the Range: Ninth Circuit Affirms U.S. Fish and Wildlife Service’s Significant Discretion in Designating Critical Habitat for Endangered Species

July 8, 2010, by Dawn McIntosh

The U.S. Fish and Wildlife Service ("Service") is often beset with litigation when it designates critical habitat for a species listed as endangered or threatened under the Endangered Species Act (“ESA”)--by environmentalists who feel the designation is insufficient, and by industry representatives who argue that it is too broad. In Arizona Cattle Growers' Association v. Salazar, the Ninth Circuit not only affirmed a ruling upholding a particular designation by the Service but, more importantly, clarified for all future cases that, when the Service uses its expertise to make a scientific determination--as it does when designating critical habitat--a reviewing court "must generally be at its most deferential."

Arizona Cattle Growers' Assn. sued the Service to challenge the critical habitat designation for the Mexican Spotted Owl, claiming that the Service 1) treated areas where no owls were found as "occupied" and 2) incorrectly applied the "baseline" approach in assessing the economic impacts of its designation. That approach only considers the economic impacts of the critical habitat designation and does not take into consideration the economic impacts of listing the species as endangered or threatened in the first place.

The Court found the term "occupied" to be ambiguous, but determined that the Service's interpretation was reasonable--particularly in light of its mandate to make conservative decisions for the protection of listed species The Court also found that substantial information in the record supported the Service's interpretation. Turning to the “baseline” argument, the Court found the Service's economic analysis appropriate, rejecting a 2001 opinion by the Tenth Circuit that found the same “baseline” approach impermissible under the ESA. (Follow link to N.M. Cattle Growers Ass’n v. U.S. Fish and Wildlife Service.) The Ninth Circuit had previously rejected the Tenth Circuit’s reasoning, the current panel explained, in a 2004 decision, Gifford Pinchot Task Force v. U.S. Fish and Wildlife Service. The Court also found the baseline approach logical and consistent with Congressional intent. The ESA directs the Service to consider the economic impacts of critical habitat designations, but not of listing determinations.

The Service has rarely found economic impacts from critical habitat designations that could not be attributed to the original listing, The distinction is important, however, because the Service may exclude an area from a critical habitat designation if the economic impacts of including the area in the designation outweigh the benefits to the species. Given that recent court decisions have found that adverse modification of critical habitat is a different standard than jeopardizing the species, it remains to be seen if the Service will adjust its economic analysis of critical habitat designations to tease apart the economic impacts attributable solely to that determination.

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