An area designated as critical habitat under the Endangered Species Act must first qualify as “habitat” for listed species, the Supreme Court held this week in the closely watched Weyerhaeuser case. The Court’s November 27, 2018 ruling, which reversed a decision by the Fifth Circuit, has the potential to narrow federal agencies’ discretion to designate as critical habitat areas that are currently unoccupied by endangered or threatened species, but the opinion leaves important questions to be answered by the lower courts – including the meaning of “habitat.” The Court also held that agency decisions not to exclude specific areas from a critical habitat designation on economic grounds are subject to judicial review, reversing the Fifth Circuit and overturning the current law in the Ninth Circuit.

Grammar Review: Adjectives Modify Nouns

Weyerhaeuser Co. v. U.S. Fish and Wildlife Service involved a challenge to the U.S. Fish & Wildlife Service’s designation of private property in Louisiana as critical habitat for the endangered dusky gopher frog. Although the frog did not currently occupy the property and had not been found there in decades, the USFWS found that the property was essential for the conservation of the species because it contained certain features necessary for the frog’s survival, including suitable breeding ponds. The landowners and the Weyerhaeuser company, a lessee of the property, challenged the designation on the grounds that the property lacked certain other features required by the frog, including open-canopy pine forest, and thus could not be considered “habitat” of any kind for the species – critical or otherwise. The district court and the Fifth Circuit upheld the designation, holding that the Endangered Species Act does not contain a “habitability requirement” for unoccupied critical habitat.

The Supreme Court reversed, in an opinion noteworthy for its narrow scope. Looking to the plain language of the statute, and foregoing any consideration of the USFWS’ critical habitat regulations or other interpretations of the Endangered Species Act, the Court reasoned that, because “[a]djectives modify nouns,” “critical habitat” must be a subset of “habitat.” But the Court remanded to the Fifth Circuit to consider the USFWS’s contention that the property could still qualify as habitat for the frog even though it would require some modification to support a sustainable population of the species. Thus, the opinion leaves unanswered the key question posed in this case and in similar challenges: whether areas not currently occupied by a listed species must be capable of supporting the species at the time of designation, in order to qualify as critical habitat.

Economic Exclusions from Critical Habitat Not Committed to Agency Discretion

The plaintiffs also challenged the USFWS’s decision not to exclude their property from critical habitat based on economic considerations, as it is authorized to do if it finds that the benefits of exclusion outweigh the benefits of inclusion. The Fifth Circuit held that, while the Endangered Species Act imposes a mandatory and reviewable duty for the USFWS to consider the economic impact of any proposed designation, its ultimate decision whether to exclude an area from critical habitat based on such considerations is committed to agency discretion by law, and thus not subject to judicial review. In doing so, the Fifth Circuit followed the Ninth Circuit’s holding in Bear Valley Mut. Water Co. v. Jewell, 790 F.3d 977 (9th Cir. 2015), and other cases.

The Supreme Court reversed, observing that the landowners’ claim that the USFWS did not appropriately consider all the relevant factors in making its decision whether to exclude involves “the sort of routine dispute that federal courts regularly review.” The Court’s holding marks a significant change in the law, in that it opens the door to judicial review of decisions not to exclude a particular property from critical habitat on economic grounds. However, any challenge to such a decision will still face an uphill battle, given the deferential “arbitrary and capricious” standard that will govern such claims under the Administrative Procedure Act.

Stay Tuned for More

On remand, the Fifth Circuit will have to consider what “habitat” really means. Meanwhile, the USFWS recently proposed amendments to its critical habitat regulations that would require the USFWS to find that unoccupied habitat has a “reasonable likelihood” of contributing to the conservation of the listed species, in order to consider designating it as critical habitat. That determination is intended to include consideration of the current status of the area, the need for habitat restoration, and the landowner’s willingness to allow such activities, among other factors. It is uncertain how the Supreme Court’s ruling may affect the USFWS’s pending rulemaking, but one thing is clear: the controversy over designation of unoccupied critical habitat is far from over.