The U.S. Court of Appeals for the Ninth Circuit has upheld the U.S. Fish and Wildlife Service's designation of 858,000 acres in Northern California and Southern Oregon as critical habitat for fifteen endangered or threatened vernal pool species.

The court rejected attacks from the Home Builders Association of Northern California on the procedures used by the Fish and Wildlife Service (USFWS) to designate the critical habitat.

At issue are scattered vernal pool complexes located across a large, two-state region. Vernal pools are seasonal puddles and wetlands that provide habitat for four endangered or threatened species of fairy shrimp and 11 protected plant species. Efforts to designate the vernal pool critical habitat, and related litigation, extend back to the 1990s. In February 2006, with litigation still pending, the USFWS settled on an 858,000-acre critical habitat designation.

The Home Builders Association of Northern California and other organizations argued that the USFWS violated the Endangered Species Act (ESA) (16 U.S.C. § 1531 et seq.) in issuing its final rule designating the critical habitat by: 1) improperly identifying primary constituent elements on the designated habitat; 2) failing to identify the habitat as either occupied or unoccupied habitat; 3) failing to predict when species will be conserved; 4) improperly excluding developed areas from critical habitat designation; and 5) failing to conduct a cumulative economic impacts analysis. Giving deference to USFWS's procedures, the appellate court, like the trial court, upheld the habitat designations and rejected the home builders' arguments.

Primary constituent elements

The ESA, in part, defines occupied critical habitat as "the specific areas within the geographic area occupied by the species … on which are found those physical or biological features (I) essential to conservation of the species and (II) which may require special management considerations or protection" (ESA, § 3(5)(A)(i); 16 USC § 1532(3)(A)(i)). The Fish and Wildlife Service refers to the physical or biological features as "primary constituent elements" or "PCEs."

Without challenging any specific habitat designations, the home builders claimed that an area must simultaneously contain all PCEs for a particular species to be designated as occupied critical habitat for that species. The court rejected this theory, explaining that the elements necessary to species' survival may occur in distinct geographic areas. For example, a species may require topographic features that feed vernal pools, as well as depressions where the vernal pools actually form – two mutually exclusive geographic areas.

"In general, there is simply no reason that two elements essential for the conservation of a species need be present in the same area. As FWS points out, the critical habitat for a bird species might contain nesting grounds while another critical habitat contains feeding sites. As explained, such separation is especially appropriate for species that live in vernal pool complexes," wrote District Court Judge Rebecca Pallmeyer, sitting by assignment to the Ninth Circuit.

Identification of a conservation point

The home builders argued that the USFWS's determination of the PCEs was invalid because the agency identified only the features necessary to the conservation of the species, and did not determine when the species in question would be considered successfully conserved. The court rejected this argument, explaining that the requirement that USFWS determine when a species will be considered conserved applies to the preparation of a recovery plan – a different part of the ESA law (ESA § 4(f)(1)(B)(ii); 16 U.S.C. § 1533 (f)(1)(B)(ii) – and not to the determination of critical habitat.

The builders had argued elsewhere that other recovery plan requirements should not be imposed on critical habitat designation. The court found that builders could not, on one hand, argue the recovery plan requirements should apply to critical habitat designation and, on the other hand, argue that the requirements should not apply. Further, if Congress had intended for the recovery plan requirements to apply to critical habitat designation, it would have said so, the court ruled, citing Russello v. United States, (1983) 464 US 16, 23.

Finally, the court stated that the difference between the two portions of the law makes sense because there is a one-year deadline for the designation of critical habitat, but no deadline for creating a recovery plan.

Overlap between occupied and unoccupied habitat designation 

Under the ESA, an area constitutes "critical habitat" if it meets the requirements for occupied habitat or unoccupied habitat (16 U.S.C. § 1532 (5)(A)).  The home builders contended that USFWS erred in the designation because the agency conflated the standards for occupied and unoccupied habitat. The court rejected the argument because no law required that every area be classified as either occupied or unoccupied, and because the agency had found that areas designated in the final rule met the more rigorous standard for defining unoccupied habitat.

Textual exclusion of areas without PCEs

In its final rule, USFWS stated that it had attempted to exclude developed areas that did not contain PCEs for the 15 vernal pool species, but the agency acknowledged that it inadvertently had included some developed areas, such as buildings, paved sites and boat ramps. USFWS stated that the inadvertently included structures were not considered part of the critical habitat. The home builders argued that this "textual exclusion" violated the ESA's requirement that specific areas be designated. However, the court, noting the builders' failure to identify an alterative procedure or point to a specific error in the procedure used, deferred to the USFWS's designation.

Economic impact

The Endangered Species Act mandates the consideration of economic impact before designating critical habitat, (ESA § 4(b)(2); 16 U.S.C. § 1533(b)(2); Bennett v. Spear, (1997) 520 U.S. 154, 172). The Fish and Wildlife Service addressed the economic impact using the baseline approach, which compares the current state of affairs with how things would look after the designation of crucial habitat. The home builders argued USFWS should have used a cumulative assessment, a contention the Ninth Circuit rejected. The court explained that although a cumulative analysis would be required under the National Environmental Policy Act before a government agency took any action that might have a negative effect on the environment, a cumulative analysis is not required before the government takes action to protect the environment under the ESA.

The Case:

Home Builders Association of Northern California v. U.S. Fish and Wildlife Service, No. 07-16732, 2010 DJDAR 12302. Filed August 9, 2010

The Lawyers:

For the Home Builders Association of Northern California: Damien M. Schiff, Pacific Legal Foundation, (916) 419-7111.

For the Fish and Wildlife Service: Robert H. Oakley, U.S. Department of Justice, (202) 514-2701.