WASHINGTON _ Home builders are hoping that the U.S. Supreme Court will overturn a Ninth U.S. Circuit Court of Appeals decision that could broaden the impact of the federal Endangered Species Act on residential and commercial construction.

But environmental groups are pressing the justices to require the Environmental Protection Agency (EPA) to ensure that states take endangered species concerns into account before giving states authority to issue construction permits under a federally mandated water pollution control program.

Lawyers for the government and the environmental group Defenders of Wildlife appeared to muddy the dispute, however, during hour-long arguments before the high court on April 17. The attorneys were arguing a case challenging the EPA's decision to allow the state of Arizona to take over administration of the program. The program, established under the Clean Water Act, requires a permit before anyone may discharge a pollutant into a waterway from any "point source," including construction sites.

The justices themselves appeared divided along ideological lines, with liberals favoring the environmental group's position and conservatives inclined to side with the EPA. But the justices also pressed repeatedly for basic information about the operation of the federal program — officially titled the National Pollutant Discharge Elimination System (NPDES) — and what role if any the Endangered Species Act plays in the EPA's current administration of the program.

In California, the state's administration of the program dates to the 1970s and is not directly affected by the case. But California water agencies filed a brief warning that the Ninth Circuit's decision could jeopardize water contracts with the U.S. Bureau of Reclamation if that agency was legally required to comply with the Endangered Species Act too.

The Ninth Circuit's decision, issued August 22, 2005, came in a petition filed by Defenders of Wildlife challenging the EPA's decision to transfer authority for the NPDES program to Arizona. Representing the agency, Deputy Solicitor General Edwin S. Kneedler told the justices that 40 states are currently administering the program under EPA-approved transfers of authority.

In its ruling, however, the Ninth Circuit held that EPA could not transfer authority to the state without first complying with a provision of the Endangered Species Act requiring consultation with the Fish and Wildlife Service. The service's local office had objected to the transfer, but in Washington, EPA and the service agreed on allowing the state to take over the program.

The National Association of Home Builders intervened in the case and joined the government in urging the Supreme Court to reverse the Ninth Circuit's decision.
"Wildlife as protected by the Endangered Species Act can't trump all other concerns," Duane Desiderio, the Home Builders' staff vice president for legal affairs, said after oral arguments. "They have to be harmonized with other statutes."

In arguments before the court, Kneedler contended that the Clean Water Act requires EPA to let states take over administration of the program if nine specific criteria are met. The government attorney said the law reflects Congress's "strong preference for state protection of waters."

But Eric Glitzenstein, a Washington attorney and Defenders of Wildlife board member, said the Endangered Species Act also requires any federal agency to avoid actions that may jeopardize a plant or animal species. He said the law requires EPA to "make a good faith effort to use the consultation process provided by [the law] to devise mechanisms to protect species."

The court's four liberal justices appeared to challenge Kneedler's argument. "We've got two statutes, each of which is mandatory," Justice David H. Souter remarked. "Why do you not have an obligation to do what you can with respect to the Endangered Species Act?"

But Chief Justice John G. Roberts Jr. asked Glitzenstein whether EPA could refuse to let a state take over operation of the program because of other federal laws, such as the Occupational Safety and Health Act. "So EPA can leverage their approval into any area of law?" Roberts asked with evident incredulity.

Both lawyers narrowed the conflict somewhat during the course of the argument. Kneedler stressed that EPA retains oversight over state administration of the program, including the power to object to a permit issued by the state agency. For his part, Glitzenstein forecast that consultations with the Fish and Wildlife Service would typically result in agreement on steps the state agency could take to protect species.

Glitzenstein also suggested the justices could sidestep a ruling by simply remanding the case to the Ninth Circuit in the light of EPA's change in position. The agency had previously acknowledged that it had to consider the Endangered Species Act before transferring authority for the program to a state, but changed its position during the litigation.

In its brief, the Association of California Water Agencies warned that the Ninth Circuit's decision could jeopardize water delivery to California farms and cities. "If you take the Ninth Circuit's decision literally, you could say that the Bureau of Reclamation could divert water from cities and farmlands in order to protect endangered species," explained Roderick Walston, a former state deputy attorney general now in private practice in Walnut Creek, who wrote the brief. "That could have a devastating effect on the economy in California and in other states."

For the home builders group, Desiderio said that upholding the Ninth Circuit's decision could require Endangered Species Act review for every construction site one acre in size or larger even if the construction posed no threat to endangered species. "That can't be what Congress intended with either the Clean Water Act or the Endangered Species Act," he said.

But Mike Senatore, senior litigation director for Defenders of Wildlife, echoed Glitzenstein's argument that the two statutes can be reconciled. "We think they're creating a conflict where we don't think one necessarily exists," Senatore said. "There are ways that both statutes can be complied with, and that is in fact what the EPA has done in past situations."

A decision in the consolidated cases, National Association of Home Builders v. Defenders of Wildlife, 06-340, and Environmental Protection Agency v. Defenders of Wildlife, 06-549, is due by the end of June.


Kenneth Jost, former editor of the Los Angeles Daily Journal, is Supreme Court editor for Congressional Quarterly and CQ Press.