Court Concludes Balancing Is Unnecessary For Critical Habitat Designation, Only Consideration

by Nossaman LLP

On November 30, 2012, the United States District Court for the Northern District of California held (pdf) that because the National Marine Fisheries Service had considered the economic impacts of designating certain areas as critical habitat for the threatened green sturgeon (Acipenser medirostris), the Service complied with its obligations under section 4(b) of the Endangered Species Act. 

Section 4(b) of the Endangered Species Act states:

The Secretary shall designate critical habitat, and make revisions thereto, . . . on the basis of the best scientific data available and after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat.  The Secretary may exclude any area from critical habitat if he determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless he determines, based on the best scientific and commercial data available, that the failure to designate such area as critical habitat will result in the extinction of the species concerned. 

After the Service designated critical habitat for the green sturgeon, the Building Industry Association of the Bay Area and the Bay Planning Coalition filed suit.  Plaintiffs alleged, among other claims, that the Service failed to comply with the requirements of section 4(b) by either (i) failing to consider the economic impacts of designating certain areas as critical habitat, or (ii) failing to balance the economic impacts of the designation against the conservation benefits of the designation.

Plaintiffs argued that the use of "shall" in the first sentence of section 4(b) created a non-discretionary duty to "consider" the economic impacts of designating an area as critical habitat.  Plaintiffs then argued that because of the use of the term "outweigh" in the second sentence of section 4(b), it was Congress' intent that the Service would only designate an area critical habitat if the conservation benefits "outweighed" the economic impacts.       

Based on a plain language interpretation of section 4(b), that court, agreeing with plaintiffs, found that the Service has a non-discretionary duty to "consider" the economic impacts of designating an area critical habitat.  However, after noting that section 4(b) does not specify any particular methodology that must be used to accomplish the "consideration," the court rejected plaintiffs' argument that the Service was obligated to perform a balancing test.  Rather, the court explained, "the second sentence of section 4(b)(2) shows that the entire 'exclusion' process itself is discretionary."  

Turning to the underlying designation, the court then found that an economic analysis prepared by an outside consultant and the Service's section 4(b)(2) report adequately demonstrated that the Service "considered" the economic impacts of the designation.  The court made a point of noting, however, that it made "no determination as to the exact methodology required for such consideration." 

In addition to rejecting plaintiffs' 4(b) challenge, the court found that plaintiffs did not have standing to pursue their third claim, which arose under the National Environmental Policy Act and Administrative  Procedure Act.  Accordingly, the court granted summary judgment in favor of defendants and upheld the critical habitat designation for the green sturgeon.

While the court refused to identify what methodology would satisfy section 4(b), it did state, in dicta, that "the mere presence" of the economic analysis in the record would be enough to establish that the Service satisfied its duty, because in the Ninth Circuit, an agency is entitled to a presumption that it considered all relevant information unless rebutted by evidence in the record.


Written by:

Nossaman LLP

Nossaman LLP on:

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