Natural Resources Defense Council v. United States Department of the Interior
2002 U.S. Dist. LEXIS 26838, 2002 WL 32140322, 275 F. Supp. 2d 1136 (2002)
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Rule of Law:
A federal court may grant a voluntary remand to an administrative agency to correct a substantive error in rulemaking but retains the equitable power to keep the challenged rules in effect during the remand period, particularly under environmental statutes like the ESA, where the risk of irreversible harm to a protected species outweighs the temporary economic prejudice to other parties.
Facts:
- The Coastal California Gnatcatcher, a songbird unique to Southern California, and the San Diego Fairy Shrimp, a small aquatic crustacean found in vernal pools, were listed as threatened and endangered species, respectively, by the Fish and Wildlife Service (FWS).
- Following legal challenges, FWS designated critical habitat for the gnatcatcher on October 24, 2000, including approximately 515,000 acres, and for the fairy shrimp on October 23, 2000, encompassing about 15,000 acres.
- The Eastern/Foothill Transportation Corridor Agencies (TCA) proposed building a four-lane toll road, and Rancho Mission Viejo planned housing and urban development, both of which would impact existing gnatcatcher critical habitat.
- An economist estimated that the gnatcatcher critical habitat designation could lead to a 'loss' of 68,382 to 175,933 new jobs and 68,708 to 159,659 new housing units over a twenty-year period.
- FWS relied on a 'baseline approach' to economic impact analysis for both critical habitat designations, which considered only the marginal impact of the designation itself, not broader economic consequences attributable to the species' listing.
- The Tenth Circuit Court of Appeals, in New Mexico Cattle Growers Association (2001), invalidated the 'baseline approach,' requiring a full analysis of all economic impacts when designating critical habitat under the Endangered Species Act.
Procedural Posture:
- On March 30, 1993, the Fish and Wildlife Service (FWS) published a final rule listing the coastal California gnatcatcher as threatened but refused to designate critical habitat.
- The Natural Resources Defense Council (NRDC) challenged FWS's refusal, and the Ninth Circuit Court of Appeals remanded the issue.
- On July 25, 1997, the district court ordered FWS to designate critical habitat for the gnatcatcher, but FWS failed to comply.
- On August 4, 1999, this court (United States District Court for the Central District of California) ordered FWS to publish a proposed critical habitat for the gnatcatcher by October 4, 1999.
- FWS published a final rule designating critical habitat for the gnatcatcher on October 24, 2000.
- FWS published a final rule listing the San Diego fairy shrimp as endangered on February 3, 1997, and following a lawsuit by the Southwest Center for Biological Diversity, designated critical habitat on October 23, 2000.
- On December 20, 2000, NRDC amended its complaint, challenging the gnatcatcher critical habitat designation for excluding certain parcels.
- Around the same time, various developers, including the Building Industry Association of Southern California (BIASC) and Rancho Mission Viejo, filed separate lawsuits challenging the gnatcatcher (and fairy shrimp for BIASC) designations as arbitrary and capricious.
- On March 8, 2001, BIASC and other industry groups filed a first amended complaint (in Building Industry Association of Southern California et al. v. Norton, et al., CV 01-7028 SVW) challenging both the gnatcatcher and fairy shrimp critical habitat designations as arbitrary and capricious.
- NRDC moved to intervene as a defendant in BIASC and sought a change of venue to this court, which was granted, and the case was transferred on August 13, 2001.
- On December 10, 2001, the government (FWS) moved for a voluntary remand of both the gnatcatcher and fairy shrimp critical habitat designations to revisit them under the Endangered Species Act's Section 4(b)(2).
- NRDC opposed the motion for voluntary remand, while numerous intervenor-defendants and related-case plaintiffs briefed the motions for voluntary remand and vacatur.
- The court heard arguments on January 14 and February 25, 2002, and directed further briefing from the government and NRDC on the proper status of the critical habitat rules during remand.
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Issue:
Does a federal court have the authority to grant a voluntary remand to the Fish and Wildlife Service to reconsider critical habitat designations based on a flawed economic analysis, and should the existing critical habitat designations remain in effect during that remand, given the potential for harm to the species and economic impacts to developers?
Opinions:
Majority - Wilson, District Judge
Yes, a federal court has the authority to grant a voluntary remand to the Fish and Wildlife Service to reconsider critical habitat designations, and the existing designations should remain in effect during that remand. The court possesses equitable power to grant voluntary remand, especially when an agency acknowledges and seeks to rectify an erroneous decision, thus promoting judicial economy. The court finds the Tenth Circuit's ruling in New Mexico Cattle Growers Association, which invalidated the 'baseline approach' to economic impact analysis under ESA Section 4(b)(2), persuasive and applicable here. This means the FWS's prior economic analysis for the gnatcatcher and fairy shrimp critical habitats was substantively flawed. In deciding whether to vacate the rules during remand, the court applies an equitable analysis balancing the seriousness of the deficiencies and doubt about the agency's correctness against the disruptive consequences of an interim change. The court emphasizes the strong public policy of the ESA to conserve endangered and threatened species, affording them the 'highest of priorities' (Tennessee Valley Authority v. Hill). Vacating the critical habitat designations carries a risk of irreversible environmental damage, particularly for the gnatcatcher and fairy shrimp, whose habitats are threatened by planned development. The court determines that the critical habitat designations provide a 'marginal benefit' by triggering Section 7 'adverse modification' consultations, which have a broader scope focused on species recovery than the 'jeopardy' standard or the Section 9 'take' prohibition, as clarified by Sierra Club v. United States Fish & Wildlife Service. This broader consultation ensures federal agencies consider the impact of actions on conservation. The economic prejudice to developers from maintaining the critical habitats during the limited remand period is considered less significant than the potential, irreversible harm to the species. Existing protections like the California Natural Communities Conservation Program (NCCP) or Section 10 incidental take permits are not deemed fungible substitutes for critical habitat designation, as previously established by the Ninth Circuit in related litigation involving the NRDC. Therefore, the court grants the voluntary remand but denies the motion to vacate, keeping the critical habitat designations in force.
Analysis:
This case reinforces the judicial role in ensuring agency compliance with statutory mandates, even allowing for agency self-correction through voluntary remand. It significantly clarifies the equitable factors courts consider when deciding whether to vacate an agency rule during remand, emphasizing the importance of statutory objectives, especially for environmental protection, and the potential for irreversible harm. The ruling highlights the distinct and crucial protection offered by critical habitat designations under ESA Section 7's 'adverse modification' standard, distinguishing it from other ESA provisions and limiting agencies' ability to diminish its impact through narrow interpretations. This decision sets a precedent for how courts balance developer interests against species conservation during periods of administrative reconsideration of critical habitat.
