The U.S. Court of Appeals for the District of Columbia has turned back a San Diego developer's broad attack on the Endangered Species Act as an unconstitutional exercise of federal power. Rancho Viejo LLC argued that the federal government had exceeded the authority granted to it by the constitution's Commerce Clause, and the developer pointed to two recent Supreme Court decisions striking down laws because they exceeded Congress's authority under the clause. A federal district court dismissed the suit, and the appellate panel in Washington D.C. affirmed that decision. "To survive Commerce Clause review, all the government must establish is that a ‘rational basis exists for concluding that a regulated activity sufficiently affects interstate commerce,'" Judge Merrick Garland wrote for the three-judge panel, citing United States v. Lopez, 514 U.S. 549 (1995). "And there can be no doubt that such a relationship exists for costly commercial developments like Rancho Viejo's." Rancho Viejo sought to build a 280-home project on 202 acres near the junction of Interstate 15 and Highway 76 in unincorporated San Diego County. The company proposed building houses on 52 acres upland of Keys Creek, which bordered the property. Rancho Viejo planned to use 77 acres, including portions of the streambed, as borrow areas for fill on the 52-acre housing site. To get the fill, Rancho Viejo had to get a Clean Water Act § 404 permit from the U.S. Corps of Engineers. The Corps determined that the project "may affect" arroyo toads, an endangered species present in the creek and adjacent to the project site, so the Corps sought a formal consultation with the U.S. Fish and Wildlife Service. In May 2000, Rancho Viejo dug a trench and built a fence parallel to the creek. The Fish and Wildlife Service quickly notified the developer that the fence resulted in the illegal "take" of an endangered species and would cause the future illegal take of toads. In August 2000, the Fish and Wildlife Service issued a biological opinion stating that Rancho Viejo's proposal to borrow material from the 77 acres was likely to jeopardize the toad's existence. The agency recommended that Rancho Viejo get its fill material from an off-site location. Rancho Viejo then sued, alleging that both the listing of the toad under the ESA and the application of the ESA to the project exceeded the federal government's authority under the Commerce Clause. The district court held that the case was the same as National Ass'n of Home Builders v. Babbitt, 130 F.3d 1041 (D.C. Cir. 1997) (see CP&DR Legal Digest, February 1998). In NAHB, the court rejected a Commerce Clause-based challenge to the application of the ESA to a hospital construction project in San Bernardino. The appellate panel agreed that NAHB was indistinguishable from the current controversy. In its appeal, Rancho Viejo cited two recent Supreme Court decisions as evidence that NAHB was no longer the controlling case. Those Supreme Court cases were United States v. Morrison, 529, U.S. 598 (2000) and Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers, ("SWANCC") 531 U.S. 159 (2001) (see CP&DR Legal Digest, February 2001). In Morrison, the high court threw out a section of the Violence Against Women Act because its adoption exceeded congressional authority under the Commerce Clause. Rancho Viejo argued that Morrison stood for the proposition that noneconomic activity, no matter its effect on interstate commerce, could not be regulated under the Commerce Clause. In SWANCC, the Supreme Court limited the authority of the Corps of Engineers under the Clean Water Act. But the appellate court rejected the argument. "Morrison instructs that ‘the proper inquiry' is whether the challenge is to ‘a regulation of activity that substantially affects interstate commerce.'" Justice Garland wrote. "Similarly, SWANCC declares that what is required is an evaluation of ‘the precise object or activity' that, in the aggregate, substantially affects interstate commerce. When, as directed, we turn our attention to the precise activity that is regulated in this case, there is no question but that it is economic in nature." Nothing in either case invalidated the holding in NAHB, the court ruled. Rancho Viejo countered that because the regulation had a noneconomic purpose — the protection of toads — it violated the Commerce Clause. But the court said no to that argument as well. "The Supreme Court has long held that Congress may act under the Commerce Clause to achieve noneconomic ends through the regulation of commercial activity," Garland wrote. Rancho Viejo's position would invalidate numerous laws regarding discrimination, health and welfare and other things, the court held. "Congress' primary object in passing product safety legislation, for example, was not to improve the productivity of industry but rather to protect the well-being of the public. Much the same can be said of federal environmental legislation. And plaintiff's position would make federal criminal law an area of particular vulnerability," Garland wrote. The court then dealt with Rancho Viejo's arguments that the ESA was overboard and that it represented an unlawful federal intrusion into local land use decisions. The overbreadth argument was essentially a facial challenge of the ESA, the court held, and such a challenge could stand up only if there were no set of circumstances in which the law would be valid. But Congress has the authority to regulate development projects, so the facial challenge failed, the court held. Finally, the court held that the ESA "represent a national response to a specific problem of ‘truly national' concern," as required by Morrison. "Moreover, while ‘states and localities posses broad regulatory and zoning authority over land within their jurisdictions, … it is well established … that Congress can regulate even private land use for environmental and wildlife conservation,'" Garland wrote, citing Gibbs v. Babbitt, 214 F3d 483 (4th Cir. 2000). "Tracing a 100-year history of congressional involvement in natural resource conservation, Chief Judge Wilkinson concluded [in Gibbs] that ‘it is clear from our laws and precedent that federal regulation of endangered wildlife does not trench impermissibly upon state powers.'" The Case: Rancho Viejo v. Norton, No. 01-5373. Filed April 1, 2003. The Lawyers: For Ranch Viejo: John C. Eastman, (714) 628-2587. For Norton: Katherine Barton, Department of Justice, (202) 514-2000.