In a long-running, potentially monumental case regarding the scope of the Endangered Species Act (“ESA”), agency discretion and authority, and property rights, the U.S. Supreme Court unanimously reversed the Fifth Circuit’s decision regarding the dusky gopher frog critical habitat designation.Under the ESA, the U.S. Fish and Wildlife Service ("Service") is required to designate “critical habitat” for listed species. In proposing to designate critical habitat for the dusky gopher frog, the Service designated some areas that were once occupied, but no longer occupied by the frog—specifically, in this case, referred to as “Unit 1.” In some instances, these areas had not contained frogs for decades.
Although the ESA provides a mechanism for the Service to designate unoccupied critical habitat, the habitat must be “essential” for the species’ conservation. The Service performs an economic impact review to determine whether the costs associated with the designation are disproportionate to the conservation benefits. In this case, the Service found that designating Unit 1 as critical habitat was not disproportionate to the economic costs and proceeded with designating Unit 1 as critical habitat for the dusky gopher frog.
Weyerhaeuser, and other landowners within Unit 1, challenged that determination. Primarily, they argued that Unit 1 habitat, which was a “closed-canopy” timber plantation, could not be a critical habitat for the frog, which lives in “open-canopy” forests. In other words, Unit 1 was not currently occupied and could not later serve as habitat for the frogs. They also challenged the Service’s methodology for estimating economic impact. The district court and Fifth Circuit affirmed the decision, concluding that critical habitat, as defined under the ESA, does not contain any “habitability” requirement and that the Service's decision to designate said critical habitat was under agency discretion by law and therefore unreviewable.
On review, the Supreme Court unanimously reversed. Foremost, the Supreme Court concluded that the ESA provides that an area is eligible for critical habitat designation only if it is habitat for that species. In the Court’s view, “critical” is modifying “habitat,” which is undefined under the ESA. Thus, “critical habitat” must always necessarily be “habitat.” Given that the lower courts did not entertain arguments on what would be a reasonable interpretation of “habitat” in this instance, the Supreme Court remanded for arguments and a decision accordingly.
Effectively, with its nuanced interpretation of “critical habitat,” it appears the Supreme Court both limited the scope of agency authority under the ESA and sidestepped the most critical issue under this appeal—that is, whether Unit 1, which contains no frogs and without modification, is completely unsuitable to frog habitation in the future, can be considered “critical habitat” under the ESA. The Supreme Court’s decision hints at their position, but on remand, the parties will present arguments on whether the record shows that the frog could survive in Unit 1.
Besides the substantive issue, the Supreme Court also reversed the Fifth Circuit on its determination that the Service's decision to not exclude Unit 1 from critical habitat is subject to judicial review. The Supreme Court found that the ESA contains language that gives the court a meaningful (enough) standard to judge the Service's exercise of discretion in the economic and other impacts review. This issue was also remanded to the Fifth Circuit for arguments and a decision accordingly.
This case was being closely monitored given its implications on the ever-increasing reach of the ESA and the ultimate scope of agency discretion generally. While nuanced and somewhat shifty, the Supreme Court’s decision does suggest a new approach to critical habitat designations. Although critical habitat can include areas where species do not currently live, since critical habitat as defined specifically includes unoccupied areas, the Service must still determine whether the critical habitat is fundamentally a “habitat.” What constitutes “habitat” is the next question, and we will have to wait and see whether an area that is (1) unoccupied, (2) unsuitable, or (3) unsuitable at the moment, but possibly habitable with modifications, could be viable “habitat” for a listed species.
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