The Supreme Court has handed down one of the most anticipated Endangered Species Act (ESA) rulings in recent years. In Weyerhaeuser Co. v. U.S. Fish and Wildlife Serv., the Supreme Court unanimously overruled the Fifth Circuit Court of Appeals, holding that the Fish and Wildlife Service can only designate property that is “habitat” as critical habitat under the ESA. The Supreme Court also held that decisions by the Fish and Wildlife Service to designate an area as critical habitat despite alleged disproportionate cost-benefit analyses are subject to judicial review. The Supreme Court remanded the case to the Fifth Circuit to interpret and define “habitat” under the ESA and review the Fish and Wildlife Service’s cost-benefit analysis and decision to designate certain lands as critical habitat.

This decision is noteworthy because it was issued by a unanimous bench. During oral arguments, the Court’s liberal justices appeared to be leaning in favor of a broad interpretation of critical habitat, as requested by the Fish and Wildlife Service, with the Court’s conservative justices leaning in favor of a narrower interpretation. The Supreme Court heard oral arguments on this case prior to Justice Brett Kavanaugh joining the bench. A 4-4 split decision would have left the Fifth Circuit’s ruling in place. Chief Justice Roberts authored the opinion and likely chose to narrowly address the issues in the case and remand for further consideration in order to attract his more liberal colleagues to join the opinion.

Background

The case centers on the dusky gopher frog, which the Court described as “‘dusky’ because of its dark coloring and ‘gopher’ because it lives underground.” The frog once lived throughout the southeast United States but has been in decline for several decades as its habitat, including open canopy forests and ephemeral ponds, has been reduced. The Fish and Wildlife Service listed the dusty gopher frog as endangered under the ESA in 2001, as the known wild population had declined to only 100 species in a single pond in southern Mississippi.

In 2010, the Fish and Wildlife Service moved forward with designating critical habitat for the frog. By that time, four dusky gopher frog populations existed, but they were all located in two adjacent counties in Mississippi. Concerned about the species being concentrated in one geographic area, the Fish and Wildlife Service proposed to designate unoccupied critical habitat in St. Tammany Parish, Louisiana on property owned by Weyerhaeuser and other private landowners. The move was unusual and concerned private landowners because the frog neither occupied that land, nor could it survive on the land in its present state. However, the Fish and Wildlife Service rationalized that the property could be converted to suitable habitat with what it referred to as “reasonable effort.”

The Fish and Wildlife Service has the ability to exclude land from critical habitat designation if it “determines that the benefits of such exclusion outweigh the benefits” of designating such area. The Fish and Wildlife Service is required to consider economic impacts, among other things, and the benefit to the species in making this determination. 16 U.S.C. § 1533(b)(2). As part of this analysis, the Fish and Wildlife Service commissioned an economic cost-benefit analysis of the critical habitat designation. Ultimately, the Fish and Wildlife Service decided not to exclude the property in St. Tammany Parish from designation, despite land value losses totaling up to $33.9 million to the landowners. The landowners argued these costs were disproportionate to any species conservation benefits because the land was not presently native habitat, would require extreme changes in order to become potential habitat, and would add little conservation benefits for the species.

Ruling

The Supreme Court considered two issues: (1) whether critical habitat under the ESA must also be “habitat,” and (2) whether the Fish and Wildlife Service’s decision not to exclude land from critical habitat designation because of economic impacts is subject to judicial review. The Court answered both questions in the affirmative.

In addressing the first issue, the Court parsed the statutory definition of critical habitat and found that critical habitat must be a subset of a species’ “habitat.” Under the ESA, critical habitat can include areas where the species does not currently live; however, the ESA does not further define “habitat.” The Supreme Court remanded the case back to the Fifth Circuit to further interpret and define “habitat,” particularly to consider if “habitat” includes areas that could be made livable “with reasonable effort” or “some degree of modification,” as the Fish and Wildlife Service advocates.

Regarding the second issue, whether courts may review the Fish and Wildlife Service’s critical habitat designations on economic grounds, the Supreme Court reversed and remanded the Fifth Circuit’s decision. The Fifth Circuit had held that the ESA gave the Fish and Wildlife Service broad discretion in excluding property from critical habitat, and because of this discretion, the decisions were believed to be “committed to agency discretion by law” and shielded from judicial review. The Supreme Court reversed, finding that the ESA statutorily requires considerations of economic impact and relative benefits to a species for critical habitat designations. Therefore, courts have and should exercise their authority to review these decisions in order to ensure that the agency considered all relevant factors and did not abuse its discretion. Having determined that judicial review was warranted, the Supreme Court remanded the case to the Fifth Circuit for further evaluation of this issue.

Next Steps

Moving forward, the Fifth Circuit will be the first court to interpret and define “habitat” as used in the ESA. It will also evaluate whether the Fish and Wildlife Service’s decision to designate certain lands is supported by the agency’s record.

Overall, the decision represents a win for private property rights and judicial reviewability of agency ESA decisions, though the critical habitat protections will remain in place for the dusky gopher frog while the case is remanded to the Fifth Circuit. Pending the outcome there, it is possible, and perhaps even likely, that the case could end up before the Supreme Court again in the future to provide a final interpretation as to the scope of “habitat” under the ESA.