Weyerhaeuser v. U.S. Fish and Wildlife Service

Environmental Law & Property Rights Teleforum

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Does the Endangered Species Act authorize FWS to designate as “critical habitat” for an endangered species private land that is not inhabited by the species and that cannot supply habitat without a radical change in land use?  Should the Supreme Court Grant Certiorari in Weyerhaeuser v. U.S. Fish and Wildlife Service (No. 17-71)?

In January 5th conference, the Supreme Court is expected to take up the cert petition in a case arising out of the Fifth Circuit, Weyerhaeuser. The case involves federal government regulation of private land in Louisiana for the purpose of protecting an endangered species, the dusky gopher frog. The United States Fish and Wildlife Service has asserted power under the Endangered Species Act to declare private land “critical habitat,” for the protection of this endangered species though the frog has not been seen there for 50 years and cannot live there absent a radical change in the use of the land. The Service has stated that it "will likely increasingly use” this authority to designate non-habitat areas outside the geographical area occupied by the species. Several organizations have challenged the Service’s authority and are appealing the divided decision of the Fifth Circuit Court of Appeals. Whether the Supreme Court decides to take the case or not, Weyerhaeuser will clearly be an important environmental law case.

Featuring:

Timothy S. Bishop, Partner, Mayer Brown

Prof. Dave Owen, Professor of Law, University of California Hastings College of the Law San Francisco

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Event Transcript

Speaker 1:                       Welcome to The Federal Society's Practice Group Podcast. The following podcast, hosted by The Federal Society's Environmental Law and Property Rights Practice Group was recorded on Tuesday, January 2nd, 2018 during a live teleforum conference call held exclusively for The Federal Society members.

Dean Reuter:                   Welcome to The Federal Society's Practice Group teleforum conference call, as today we discuss Weyerhaeuser vs. U.S. Fish and Wildlife Service, a case that involves critical habitat under the Endangered Species Act and it scheduled for conference discussion this Friday at the U.S. Supreme Court. I'm Dean Reuter, Vice President, General Council, and Director of Practice Groups here at The Federal Society. Please note that all expressions of opinion are those of the expert on today's call. Also, this call is being recorded for use as a podcast in the future and will likely be transcribed for search ability on the internet.

                                         We're going to get opening remarks from two experts today. In order, we'll hear first from Timothy S. Bishop, he's a partner at Mayer Brown, goes by Tim. Welcome.

                                         We'll here, then, from Professor Dave Owen, he's a Professor of Law, University of California Hastings College of the Law San Francisco. We'll hear ... as I said ... opening remarks from each of them about 10 to 15 minutes each, but then as always we'll be looking to you, the audience, for questions, so please have those in mind for when we get to that portion of the program.

                                         With that, Tim Bishop, the floor is yours.

Tim Bishop:                     Thanks, Dean. I appreciate it. I appreciate the invitation, and appreciate Professor Owen agreeing to participate here. It takes two to debate. I am Council of Record for Weyerhaeuser in this case, and as Dean said, our [inaudible 00:01:37] petition is going to be considered for the first time this Friday.

                                         This is a case about Fish and Wildlife Services designation of private land as critical habitat for an endangered frog under the Endangered Species Act. The peculiarity here is that the land that the service has designated isn't habitat for the frog, and it can't be made habitat for the frog without a radical change in the use of the land.

                                         Nevertheless, the designation of this private land ... this critical habitat ... Fish and Wildlife Service concedes would have the immediate effect of reducing the value of the land between 20 million or 34 million dollars, a significant hit obviously.

                                         Our position, is that as a matter of plain statutory language, the Endangered Species Act does not permit this designation. Six members of the Fifth Circuit ... consenting from a denial of en banc in a lengthy and careful opinion by Judge Edith Jones ... agree with us.

                                         There is no law complexity here both in the statute and in the facts, so I think in order that the listeners can understand what's going on here, let me talk about the frog, the land, and then after I've discussed the facts I'll come back to the statutory provisions that control.

                                         The endangered species involved here is now known as the dusky gopher frog. That's a new name that the Service came up with during the course of the designation here. Before that, it was called the Mississipi gopher frog. The reason for that is that the frog lives only in Mississippi. It hasn't been seen in Louisiana for more than 50 years, and the closest population is in Mississippi. It's 50 miles from the state border.

                                         What the frog needs is undisputed. What it needs for its habitat is undisputed. The designation ... I should explain ... comes in the form of a rule, and follows the usual rule making procedure including the submission ... consideration of scientific evidence, the submission of comments following notice.

                                         So, the Fish and Wildlife scientists agree that in order for the frog to survive and thrive, it needs three things. First of all it needs isolated ephemeral ponds in which it can breed. An ephemeral pond in particular, because you have a permanent pond and fish can survive in it, breed in it, and eat frog spawn. You have an ephemeral pond, it's much safer for the frog to breed there.

                                         The second thing that it needs is an open canopy forest. In the uplands for the frog's non-breeding habitat. This is where it spends most of its time. It has to be an open canopy forest ... typically it would be long leaf pine. Then, it also needs an upland open canopy forested corridor between the ponds and the upland habitat, so that it can travel from the breeding ponds to its upland habitat.

                                         These upland areas need to have an abundant herbaceous ground cover, which both supplies cover for the frog and is a source for its food. It just so happens that, that sort of herbaceous grounds cover in an open canopy forest can really only be maintained with frequent fires. Ponds, open canopy forest, herbaceous ground cover, maintained by frequent fires. Those are all necessary elements for the frog to survive and to thrive.  That's all out of the Fish and Wildlife Services' designation rule.

                                         So, the land involved here, which was designated as critical habitat for the frog, is 1,500 acres owned by Weyerhaeuser and others in St. Tammany Parish in Louisiana where the frog has not been seen for 50 years. In this litigation it's known as Unit 1.

                                         Now, Unit 1 does have a series of ephemeral ponds of the sort that the dusky gopher frog needs for breeding, but of the essential elements the frog habitat that is the only one that it has. The land is run as a forestry operation by Weyerhaeuser. Weyerhaeuser grows loblolly pines, which are a closed canopy forest. It doesn't have the open canopy forest that the frog requires. It doesn't have the abundant ground cover that grows in an open canopy forest, and it isn't maintained through frequent fires.  So, if the frog were translocated to this property in Louisiana, it couldn't survive. It doesn't have critical, essential elements for frog habitat.

                                         There's something else I should say about the land here. This 1,500 acre tract is elevated. It's an elevated section of what we all know is a very low lying part of the country. After Hurricane Katrina in 2005, these sorts of elevated properties became very sought after, desirable for development.

                                         Now Weyerhaeuser lease doesn't expire until the 2040s, but in the meantime, the owners have worked very hard with St. Tammany Parish to get zoning approval for a longterm plan to develop this land for residential and commercial use once logging is complete.

                                         St. Tammany Parish filed an amicus brief in support of certiorari here explaining how important it is to the Parish that this property be developed. St. Tammany Parish is one of the fastest growing parishes in Louisiana. It grew 22% in population in the decade after Katrina. The Parish says that this particular property is important, because of its elevation, because it's served by a major road. It's told the court that it thinks zoning authority lies in its power, not the power of a federal agency in Washington. It is said that the requirements ... particularly the requirement of frequent fires to maintain a frog habitat on the property would be destructive of both the health of the local neighborhood, and the residents' ability to use the road.

                                         So, despite all of this, the service ... Obama Fish and Wildlife Service went through [inaudible 00:10:50] and designated Unit 1 as critical habitat under the Endangered Species Act, even though it lacks open canopy forests, dense ground cover, the frequent fires. What it said was well this may not be habitat now, but it could be habitat one day. We could translocate the frog there. The owners could change the use of the land, either voluntarily or in response to permit conditions, which is something I'll get to when I describe the Endangered Species Act requirements.

                                         The land is currently designated. There are no frogs on it. This suit ensued. Fish and Wildlife Service, as part of its designation did an economic analysis, ultimately found no economic value in the protection of the frog, but it found there was biological value in the protection of the frog. On the other side of the vance, it said, well if nothing ever happens with the land, then there'll be no loss in value, but ... and more realistically we think ... there's an immediate loss of value of 20 million dollars if we assume that 60% of the land will have to be set afire for frog habitat, or if the federal government prohibits development at all, there will be an immediate cost of 34 million dollars to the owners.

                                         They conducted a balance of those costs and the biological value of the frog, and found the frog won out. How does this work within the Endangered Species Act statutory scheme?

                                         The way that the government manages land that designated as critical habitat is through the Endangered Species Act, Section 7, consultation requirement. Section 7 says basically that no federal action can result in the adverse modification of critical habitat, so if any federal action is involved including the issuance of a permit, then the consultation requirement is triggered. Typically, the permit is then conditioned on the private land owner offering protections for the endangered species involved.

                                         Here, the ephemeral ponds may be treated as orders of the United States under the Clean Water Act. Obviously the scope of the Clean Water Act is something I'm litigating at the moment in the challenge to the clean water rule. It's also something that's an issue, because the Trump Administration is in the process of dismantling the 2015 Rule while the litigation proceeds. My experience in litigating Clean Water Act cases is that if there's water in it the Core or the EPA will try to claim jurisdiction over it, and ephemeral ponds in particular.

                                         I argued a case in the Supreme Court on behalf of Borden Ranch, which was fined a million dollars for deep plowing through an ephemeral pond on its farm outside Sacramento. These things are treated by the agencies quite commonly as water of the United States. If, development or use of the land indeed for logging requires any fill or adds any pollutants, interferes with ephemeral ponds, and a Clean Water Act permit is required, then it can be anticipated the agencies said they would require about 60% of the land to be set aside as a frog preserve, or perhaps they wouldn't allow development at all. So, that's sort of how the critical habitat finding is implemented.

                                         What this case is about ... the legal issue here is what is this critical habitat scheme under the statute. Our position is that only habitat of a species can be designated as critical habitat. We get that from Section 4 of the Endangered Species Act, which says that the service shall designate any habitat of a listed species, which is then considered to be critical habitat, shall designate any habitat, which is critical habitat. Critical habitat is then defined in Section 3 in two categories. The first is occupied critical habitat, which can be designated if it has the physical or biological features essential to the conservation of the species, and the land requires special management.

                                         As a separate category, which the service applied in this case for areas outside the geographic area that's occupied by the creature, so unoccupied critical habitat. An unoccupied critical habitat can designated upon a determination by the Secretary that the area is essential to the conservation of the species. But, those two types of critical habitat operate ... we contend in this case ... under the requirement of Section 3 will critical habitat be habitat. We think that's plain reading of the statute. The centers on [inaudible 00:17:48] with the Fifth Circuit agreed with that habitat of subspecies [inaudible 00:17:53] quote irreducible minimally to critical habitat. Other elements of the statute context, which we know the court looks at when interpreting a statute, support that. The Section 7 consultation requirement itself says that any federal action that would modify quote habitat, which we've determined to be critical habitat has to go through the consultation process. Again, that assumes the critical habitat is habitat.

                                         Section 3 of the statute says that critical habitat shall not include the entire geographic area, which can be occupied by the listed animal. Which, can be occupied, so Congress' assumption in Section 3 is that critical habitat is at most co-expansive with and nearly always narrower than the area that can be occupied by the creature. Here, the service has extended the frog habitat to an area that can not be inhabited by the species without radical changes.

                                         Apart from these plain language and contextual methods of interpretation, we think it's important here that there's some constitutional issue that come into play when you read the statute. The designation of this land pushes hard against the authority of local government to decide how its land will be used. It really turns the agency into a super zoning agency. I mean, it now is proposing to tell St. Tammany Parish what can be built on Weyerhaeuser's property, and take that authority away from the Parish.

                                         In addition, the reading subverts the commerce clause power, we think. The frog ... the agency has admitted ... has no economic benefit, only biological benefits were identified in the designation, and it's a non-economic intrastate species. We think that ... you know, you don't have to resolve in this case the commerce clause, or exactly how [inaudible 00:20:35] applies to the endangered species [inaudible 00:20:39] something the court has never addressed, but the constitutional avoidance principle, which was a principle deciding factor in how the court read the Clean Water Act [inaudible 00:20:51] case, says when you have these sorts of federalism in commerce clause issues that are raised by the agency's broad interpretation of the statute that the court says no, we need to read this more narrowly.

                                         The background here, the Fifth Circuit Panel 2-1 upheld the regulation. It was an eight to six vote to deny en banc. There was solid opinions from Judge Owen and Edith Jones in the Fifth Circuit, which we're hopeful will help propel this to the court's attention. There were 13 amicus briefs filed, including a brief filed by 18 states concerned about the impact on their federalism of this sort of expansion of agency power.

                                         St. Tammany Parish filed a brief accounting in Utah, concerned about the use of this same authority for the sage-grouse filed a brief. Many trade groups with members interested in land use, and many groups that seek to limit the constitutional authority of the federal government filed briefs.

                                         With that background, I'll turn it over to Professor Owen.

Professor Owen:             Okay. Thank you, Tim. I'm going to try to keep this a little bit shorter so we can get to the audience questions, but briefly what I'm going to try to do is counter some of the arguments made by Mr. Bishop in his talk, and also in the served petitions, and descending opinions.

                                         In the basic thesis of my intro in the next couple of minutes is that what the Fish and Wildlife Service did in this case is not nearly as outlandish as it had been made out to sound. It's also a lot less consequential. This case is not the cause for alarm that it has been presented as.

                                         A lot of the alarm about this case really comes down to a couple of premises. Now, the first premises asserted in a lot of the petitions for review is that this decision ... if it stands ... will allow the Fish and Wildlife Service to designate pretty much anything as critical habitat. Then, the second premise is that once that habitat is designated, the federal government will then assume pretty much direct regulatory control over the property.

                                         That might sound a [phonetic little hyperbolus 00:23:26], but that is what the petitions are saying. I'll just give you a quick quote from the Pacific Legal Foundation Petition. They said, "The Fifth Circuit decision allows the federal government unlimited authority to regulate land and water resources, even if they have no connection with a protected species." That's not true. I'll see if I can briefly explain why.

                                         First off, this decision, as it stands does not allow the Fish and Wildlife Service to designate pretty much anything as habitat. Under Section 15.325 of U.S. Code, which is Section 2 of the Endangered Species Act, the Division of Wildlife Service can designate unoccupied habitat as critical habitat. It clearly has that authority under the statute, but that unoccupied habitat has to be essential ... that's the word that the statute uses ... to the conservation of the species. Under its own rules, the Fish and Wildlife Service will only designate unoccupied habitat if it finds that the occupied habitat is not sufficient to conserve the species.

                                         So, in this particular instance, the Fish and Wildlife Service originally designated ... was going to designate only occupied habitat. They put that proposal out for peer review, and the peer review scientists unanimously said, "That is not enough. The species is not going to make it if all you do is protect habitat that is already occupied." So, the Fish and Wildlife Service then went out and designated this additional tract.

                                         The tract that it designated ... as Tim said ... it has excellent breeding pools that could be used by the species. It is the area where the species was last seen in Louisiana, and as he also said, it does not currently have the close forest canopy that the species needs. To get that back, would require some reintroduction of the natural fire regime of these forests, but the Fish and Wildlife Service here ... and often with endangered species ... is a somewhat desperate circumstance where all the good habitat is gone. If it wasn't gone, the species wouldn't be endangered.

                                         So, it is left if it's going to find a course towards recovery and towards getting the species off the list, trying to work with habitat that is in really rough shape, and if it doesn't do that, the species won't be conserved. The fact that the Fish and Wildlife Service here is designating as critical habitat, habitat that in some ways is of pretty marginal quality is the normal circumstance it finds itself in when species are in rough shape. It's directly related to the species status.

                                         What that means going forward is not that there's a blank check for the Fish and Wildlife Service to go designate habitat as critical habitat wherever it chooses to do so. It would have to make the same demonstration that it attempted to make in this case, that this habitat that it is designating really is crucial ... essential is the statutory word ... to the species' survival.

                                         Okay, so what happens if the habitat is designated as critical habitat, does that turn the federal government into a super regulator of the property as Mr. Bishop suggested. Again, the answer is no.

                                         Initially, it's important to keep in mind that the averse modification provision, which prohibits adverse modification of critical habitat, is lodged within Section 7 of the Endangered Species Act, which applies only to the actions of federal agencies themselves. In other words, more specifically, Section 7 requires federal agencies to ensure that the actions that they authorize, or fund, or carry out do not jeopardize the continued existence of the listed species, or not likely to jeopardize the continued existence of the species, or to adversely modify the critical habitat.

                                         What that means is that if you were a land owner, and your property is designated as critical habitat, there is no resulting regulatory constraint at all until you decide that you need a permit, or you need money to do something on your property. You need that permit from the federal government.

                                         Most of us never need that permit. Most of the things that we do day to day on our property do not implicate federal regulatory authority, and that's true here as well. Weyerhaeuser doesn't need a federal permit to log its land. It doesn't need a federal authorization to continue doing exactly what it's doing.

                                         In fact, it wouldn't need federal authorization to build on the land if it were to avoid the five breeding pools that ... or the five potential breeding pools that provide ephemeral wetland habitat. So long as all Weyerhaeuser wants to do is build on the portions of its property that don't routinely flood, which might be a good idea anyway, no federal authorization is required, and there is no legal constraint whatsoever resulting from the critical habitat designation.

                                         Now, to make things even more striking, even if Weyerhaeuser decides it is going to fill in those ephemeral breeding pools, there probably isn't any federal authority here either. That's because of a case called Solid Waste Agency versus Northern Cook County versus the U.S. Army Corps of Engineers. It's a case that Tim knows well, because he won it. In that case, the Supreme Court said that the Clean Water Act jurisdiction did not extend to a set of isolated ephemeral wetlands. Mr. Bishop also mentioned the Borden Ranch case as an example of a case in which the federal government did attempt to assert jurisdiction over ephemeral wetlands. It's true. What he did not mention is that the Ninth Circuit specifically set that jurisdictional assertion aside, and did not convict Mr. Borden, or uphold his conviction on any of the claims arising out of the filling of the ephemeral [inaudible 00:29:29] pools on the site.

                                         So, probably there's no federal jurisdiction here at all, which means probably there is no constraint at all, even if this is designated as critical habitat.

                                         Let's set that aside for a moment. Let's assume that there is federal regulatory authority over these wetlands. Then the question is, well how does the critical habitat designation change the picture? The answer again is a lot less than you might think. The reason for that is that even without the critical habitat designation, this land would still be subject to the jeopardy prohibition, which is an independent part of Section 7 of the Endangered Species Act.

                                         So, Section 7 has two prohibitions. One is on federal actions like does it jeopardize the continued existence of the listed species. The other, is on federal action like adversely modified critical habitat. The critical habitat designation only matter in terms of regulatory constraints. If it leads to some higher level of constraint, that goes above and beyond what would be there from the jeopardy prohibition.

                                         If you look at the statutory language, it sounds like it might, but a few years ago I was curious how much independent effect the critical habitat provisions and the adverse modification prohibition actually was having. So, I did a study that involved coding about 4,000 biological opinions, and then taking a more detailed look at several subsets of biological opinions to try to figure out what independent effect the adverse modification prohibition had. The answer from the paper trail was none. In all of the opinions I looked at, there wasn't a single one where the Fish and Wildlife Service, or the National [inaudible 00:31:12] Fishery Service found that adverse modification occurred without also finding that jeopardy had occurred.

                                         In other words, the cases in which the adverse modification prohibition added additional regulatory constraint appeared on paper to be a null set. I should also say, that finding either adverse modification or jeopardy is a very, very, very rare outcome. The most recent study to look at the frequency of this outcome ... this is a study by Malcolm and Lee and it appears in the proceedings of the National Academy of Sciences ... found that in the entire pool of consultations they looked at that adverse modifications and jeopardy prohibitions and happened zero out of ... I forget the total number, but I think it was thousands, and thousands of times.  So, these don't happen often at all anyway. When they do happen, they go together.

                                         As part of that same project, I also interviewed agency biologists, and they gave me a somewhat more nuance story. What they told me is that when they negotiate with other federal agencies over actions that might affect listed species, the fact that an area is designated as critical habitat has a little bit of an impact on the negotiations. It gives the Fish and Wildlife Service biologists the sense that maybe they have a little leverage to ask for a little bit more protection. They were unanimous in saying that this effect to the extent that this exists is subtle.

                                         So, the bottom line here ... not just I think for this piece of property, but more generally ... is that a critical habitat designation is a pretty subtle adjustment in the regulatory regime. It does not drastically change the circumstances on the ground, and it is not going to lead either here or elsewhere to the kinds of catastrophic economic impacts that the briefs warn about over, and over again.

                                         I'm happy to get into some of the more specific legal details about statutory interpretation and the question, but I think for now I'll just stop it there so we can get to audience questions.

Dean Reuter:                   Thank you very much, both of you. This is Dean Reuter, again. Let's open the floor to questions in a moment we'll all hear an announcement that will say the floor mode is on. After you hear that announcement, if you have a question, push the star button and then the pound button on your telephone.

                                         So, once again, if you have a question for either of our experts, push the star button, and then the pound button on your telephone. We've got quite a few callers on the line, but no questions just yet. Push the star button, then the pound button if you have a question.

                                         Let me start by asking a question. I suppose that, Professor Dave Owen, I thought I heard you say ... and, please correct me if I'm wrong ... that at a future point Weyerhaeuser could fill in the ephemeral ponds likely without any consequence, especially if they don't need federal government money without any consequence, they're free to do that even if they lose the designation fight. Did I hear that correctly, and if that's the case, maybe there's a question for Tim Bishop, why doesn't Weyerhaeuser do that now, and defeat the designation, or do that in the future and defeat the designation?

Professor Owen:             The short answer is I can't say for sure without having seen a map of the site and the wetlands, and even then it's the determination that the Army Corps of Engineers would make. In general, however, the Army Corps' jurisdiction over ephemeral isolated wetlands ... so, that is wetlands that are temporary, appear briefly, and are isolated from connections to other surface water bodies ... has been pretty limited since the U.S. Supreme Court's decision in Swank, in Solid Waste Agency of Northern Cook County versus U.S. Army Corps of Engineers.

                                         The exceptional circumstances that arise ... to some extent it's regional ... so, in New England, for example, the Corps was a little more aggressive about asserting jurisdiction over that type of wetland. Other than that, the circumstances in which you would be likely to have a jurisdictional determination with wetlands are where the ephemeral wetland is quite close to ... even though it's isolated from a permanent surface water body, so it's in the flood plain of that surface water body, or it's close enough that there's very heavy biological exchange back and forth. In those circumstances the Corps might be inclined to assert jurisdiction, but ... and I don't know the site well enough to say whether that is true here ... but, on it's face, I'm surprised to hear Mr. Bishop say with such confidence that the economic effects are real, and that there would be ... or to imply that there would be ... federal jurisdiction over these wetlands. I think he already won that case.

Dean Reuter:                   I think what you're saying ... correct me if I'm wrong, Professor ... is that if there is federal jurisdiction it comes through the Clean Water Act, not through the habitat or Endangered Species Act.

Professor Owen:             Right. The critical habitat provisions don't create federal. They create conditions on other exercises of federal authority. So, if the federal government does not have jurisdiction over those wetlands through the Clean Water Act, I can't think of any other federal hook that would trigger the adverse modification prohibition for those lands. Unless, the Parish ... for example ... decided that it was going to try to secure housing in urban developments department funds to build up the site, or it was going to use highway dollars to build a road through the site. In those sorts of circumstances, then the adverse modification prohibition would apply. If this is just local land used developments being permitted by local authorities ... as is the case with most real estate development ... the critical habitat provision isn't ... the designation doesn't change the legal regime at all.

Dean Reuter:                   Alright, Mr. Bishop you want to jump in. Go ahead.

Tim Bishop:                     If I have just a minute. Absolutely none of that is right. I'm not about to say that my client has jurisdiction of waters on its land, but in 25 years of litigating Clean Water Act cases, I have yet to find a wetland that the Corps says, "Oh, we don't have jurisdiction over that." Of course in Swank, what the court struck down was one basis for jurisdiction that an isolated pond was used by migratory birds. As you know from the 2015 Obama [inaudible 00:37:59] that we're now challenging, there are a host of very complex, and subjective criteria that bring wetlands and other water features within jurisdiction. But, I would say is ... you know, you can put all of that aside ... what we're dragged into here through the critical designation is that any use you want to make of the land gets you into this lengthy agency process, and probably into litigation. Remember that the agencies take the position that riding a bicycle through a jurisdictional wetland is illegal.

                                         What I haven't heard in any of Professor Owen's presentation ... He says, "Oh, don't worry about this. The agencies will take care of it." Although, that's a lengthy and costly process, and I fear the outcome of it. But, what I don't hear anything about is the language of the statute, because what the language of the statute says, is that the agency shall designate habitat of a species that is critical habitat. This land is not habitat. It can't be designated ... under the language of the statute ... and therefore, Weyerhaeuser and the other owners should never be dragged into this lengthy federal process once they've got their local zoning.

Dean Reuter:                   Professor, do you want to respond to that?

Professor Owen:             Yeah. Thank you.

Dean Reuter:                   Before you respond, let me just make another call for questions. Push the star button, then the pound button if you'd like to join this conversation. The lines are wide open. Professor Owen, go right ahead.

Professor Owen:             Okay, on whether or not this is habitat. Tim's position ... and, this is the position taken ... if it really first arose in the [inaudible 00:39:44] opinions that came out of the Fifth Circuit ... something is not habitat unless the species currently could live there. That's not typically the way we use the word habitat, and talk about species. We talk about habitat that is current habitat. We talk about unoccupied habitat. We can talk about degraded habitat, former habitat. Habitat gets linked to all sorts of other words that extend the word to areas even where the species right now in this moment would have trouble surviving.

                                         So, to define habitat solely as a place that has all the conditions necessary for a species to survive right now would limit the word beyond the way it is typically used in discussions among biologists. It also would create some pretty perverse incentives, because if what you have to do to make sure your area is not designated as critical habitat is just to make sure that no species could survive there. The obvious response ... and Dean, you alluded to this in your question earlier ... will be to make very sure that you maintain your land in the condition where no species could ever live there.

Tim Bishop:                     Well, of course if you were to do that when there was a species on it that would be a take, but you know the statute does not say historical range, former habitat, potential habitat. It says habitat. You know, I like to start reading statutes with the words that Congress used, and then do what Justice Scalia did and a number of the current justices, which is to look at the dictionary. We've cited a number of those dictionary definitions, and they're all consistent. Habitat, the area or environment in which an organism normally lives or occurs. It's a place where a plant or animal species naturally lives and grows. Those are the dictionary definitions cited by Edith Jones.

                                         I don't see this ... I think this is the key debate in this case, and what we're asking the Court to decide. Does the word habitat have a meaning that constrains the discretion of the agencies to say, well no, we can just find one feature even though the creature can not survive there, would die if we translocated it there, we can find one feature that the land has and then we can say that, that's critical habitat. I think that refutes the Professor's prior statements of the scope, the danger of how broad the agency's power here is, because to find one feature of land that is necessary for an endangered species is really no constraint at all, and I for one am not content to allow the agency's discretionary decision that it's essential, but a land with a particular type of tree in which an endangered species might nest it's efficient to label that critical habitat with all that follows from that.

                                         We see this as a plain language statutory interpretation case. I would point out one other provision of the statute that I think is quite relevant here, and that is that Congress in Section 5 authorized the Secretary to acquire land. That acquisition power to preserve species isn't limited to habitat in the way that critical habitat provisions are, and it isn't limited to lands essential to species survival, so Congress seemed to have in mind ... and in fact, the Supreme Court in the Sweet Home decision that, that purchase authority is well suited to address land, and I'm quoting Sweet Home here, "that is not yet but may in the future become habitat for an endangered or threatened species." If, we want ... as a society ... to expand the opportunities for creatures to survive by translocating them to private property that doesn't currently offer them the means to survival, Section 5 provides a way to do that, the tax and spend power.

Dean Reuter:                   Let me give Professor Owen a chance to respond there, and let me ask a question of you, and then we'll go to the audience. We do have one question pending. When it comes to statutory interpretation, should we be looking ... in this statute in particular ... to the language, and the common usage of biologists, and the experts that populate the agencies, or should we be looking to something the legislatures understand?

Tim Bishop:                     Well, you know Congress passed this statute-

Dean Reuter:                   I'm sorry, I was asking Dave Owen to respond to that.

Tim Bishop:                     Oh, okay. Sorry.

Professor Owen:             Okay. So, let me before answering that, respond to one other thing that Tim said, and I think this is a point I think in which we are strongly in agreement, and that is that Section 5 authority ... This seems like a case that cries out for Section 5 authority. In other words, this seems like a situation in which a purchase of land by the federal government to protect the habitat that they found does seem like a really sensible resolution to the problem. I would disagree that, that is the only possible resolution under the Endangered Species Act, but it does seem to me like a sensible step.

                                         To answer your question about whose definitions we should be looking to, whether a lay definition of habitat, or the term as it is conventionally understood among biologists, I think both, but this is a statute that is directed at specialized agency biologists, so usage in the field certainly is relevant here.

Dean Reuter:                   Okay. We do have a question ... Go ahead, Tim.

Tim Bishop:                     I'm sorry. Just very quickly. These provisions of the statute perhaps in response to the Tennessee Valley litigation, and they were directly intended to cut back on the authority that the Supreme Court recognized in the Tellico Dam cases, so when they passed this, Congress said that it was defining critical habitat in order to narrow the scope of the term, and to address the problem that critical habitat could lead to the designation of virtually all the habitat of a listed species as critical habitat.

                                         This was intended by Congress as a narrowing device, not as a way in which the definition could be expanded by the agency exercising its purported discretionary authority.

Professor Owen:             Just to be clear for our listeners, Mr. Bishop is quote legislative history there. Those words that he just quoted do not appear in the text of the statute.

Dean Reuter:                   We have one question pending from our audience, if you'd like to join the queue push the star button, then the pound button on your telephone. Let's take our first call of the day.

Speaker 5:                       Hello. [inaudible 00:47:27] here in the Boston Chapter, I have two abstract questions. One is, is there over acting principle of law that says no matter how much the plaintiff deserves to win, because he does have the right, but the proportionalities say that the cost is so great that he won't win. That's my first question. The second one, is, is there any [inaudible 00:47:49] tell judges to give credit to unknowability. For example, you may be thinking that I'm believing the frog is not worth it on proportionality, how do I know, the frog may be worth far more than we realize.

                                         Edward O. Wilson is always writing about this. He's the inventor of the word biodiversity. He says we are just in our infancy of understanding how the species relate to one another and which one may control the fate of others. Do you know of any ... of course, I'm only asking you a law question ... do you know of any law that sort of opens this story for unknowability, as you did say in [inaudible 00:48:33] Louisiana development it may turn out different than we think, but is there any principle that would [inaudible 00:48:39]?

Tim Bishop:                     This is a federal statute, and the Supreme Court has developed particular ways of reading federal statutes that start with the statutory language, but look to the constitutional background, that will look to the purposes stated in the statute, and sometimes the legislative history. The sorts of policy questions that you're talking about are sort of extra statutory.

                                         The Supreme Court in the Tellico Dam case really did say that when Congress passed the original statute in 1973, that it had in mind that species protection would be sort of the be all and end all. That there would be no sort of cost balancing there, and the result of that was that a massive dam project was halted, and that sent Congress back to the drawing board. They said, no that's not what we intended. We didn't intend the reach of the statute to be so broad, or so Draconian, and they adopted these critical habitat provisions as a limiting principle.

                                         The Endangered Species Act encapsulates important policies, but it does so in statutory language the courts are very familiar with handling, and it's our position that Congress took a very clear position when it used the word habitat, that to be critical habitat it's got to be habitat. If we decide as a society that to deal with issues of unknowability or preservation in the face of the unknown in the future, there is a provision Section 5 that says we can use ... that Congress can use the tax and spend power to do that, and therefore not impose the cost solely on private landowners.

Speaker 5:                       Thank you.

Dean Reuter:                   [crosstalk 00:50:55] Owen, anything at this point? Yeah, go ahead.

Professor Owen:             Yeah. I would say that ... So, first off, ma'am I just could quite understand some of the words in the first part of your question, so I may not be responsive to that. On the second part, you were asking is if there is any law that takes into account our uncertainty about the future value of biological resources, and yes, the Endangered Species Act does just that. One of the reasons that Congress passed the law in the first place, and left it largely unchanged. There were some adjustments, but not the kinds of drastic constraining adjustments that Mr. Bishop described after the Tellico Dam case, is that it viewed endangered species as a resource of often uncertain and unknowable potential value. The idea was that before these species ... if we keep these species around we may someday learn things from them, or learn that they have values that we didn't initially appreciate.

                                         So, that is part of the underlying philosophy of the law. This is slightly tangential, but I can't resist since Mr. Bishop brought up the Tellico Dam case. Particularly, I think, with this audience, there may be people who are really interested in the back story, and after story of that case. As Mr. Bishop said, a massive dam project was temporarily halted until Congress passed a rider and let it through, but after the case came down, Congress created an exemption procedure to the Endangered Species Act that let a high level cabinet committee decide whether the project should proceed in spite of the fact that it was going to jeopardize species or adversely modify their habitat. That committee convened to consider the Tellico Dam, and it came to the conclusion that the project was such a terrible port barrel boon doggle. In some ways it was Kelo versus New London that the confiscation of rural land to support a massive big government project that made no economic sense at all, that in fact the project should not proceed, even though it was already 95% done. There were comments about what that revealed about the original design.

                                         After that happened, Tennessee legislators ran through a rider that allowed the project to proceed anyway, even though, the conclusion was that it made no economic sense and never had, but I think it a worthwhile story to keep in mind when you hear about the astronomical costs of the Endangered Species Act. In the most famous iconic Endangered Species Act decision we have, the Endangered Species Act stuck up for small rural landowners, and stuck up in opposition to the money wasting practices of big government.

Speaker 5:                       [crosstalk 00:53:44]-

Dean Reuter:                   Ma'am, if you don't mind if we could move you to the back of the queue and try and get to these two other questioners.

Speaker 5:                       Yes.

Dean Reuter:                   Thank you. Go ahead for the next caller, and ma'am if you want to ring back in if we have time, we're happy to take your follow up question. Go ahead, caller.

Jason:                               Yeah, this is Jason [inaudible 00:54:03] from Miami. I apologize if this was already covered, I missed part of the call, but to what extent do these regulations and laws implicate the [inaudible 00:54:14]. I guess just generally speaking how does this all work with eminent domain and compensation.

Dean Reuter:                   Who wants to take a shot at that?

Tim Bishop:                     Well there is a ... This is Tim Bishop. Let me have a go. I mean, there is a provision known as Section 5 that allows a tax and spend approach, so purchasing land instead of designating it. You know, that presumably operates through a form of eminent  domain. I think the more interesting question ... the power is there. I mean, I don't know. Perhaps the Professor does, how often that has been used, but I have not heard of that provision getting a great deal of use. It involves spending-

Professor Owen:             I'll just quickly interject [crosstalk 00:55:16] it does get quite a bit of use, but it's not that controversial, so we don't hear as much about it.

Tim Bishop:                     Okay. So, that's possible. Now, the more interesting question, I think is if you designate land ... if the agency says one of the three scenarios in it's economic analysis, well we won't allow development here, we're going to turn this over to the frogs. They estimate the cost of that is 34 million dollars. It does at that point suggest that a takings analysis is appropriate. I don't know if you've done much takings work, but it's very hard to win a takings case.

                                         The government has all sorts of defenses, including sort of preexisting legal schemes that you buy into that sort of impose these requirements that you're supposed to have known about. Whether there's any remaining value at all in the land, so the government escapes the total wipe out. It's just a very complex inquiry that you may know coming from Miami that the Corps has recently been hit with a very large takings judgment in a partial takings case where it prohibited development because of some wetlands in Florida, the northern part of Florida. So, you know, definitely it raises issues, but it's a question of how much value is taken and how much value remains and whether any of the traditional takings defenses about having purchased into the problem apply. It's certainly not an easy case to make out.

Professor Owen:             I agree with that analysis. I'll just add that I have never seen a takings decision that arose out of critical habitat designation. So, regulation of wetlands under Section 404 definitely leads to some takings litigation, but I've never seen a case that arose directly out of a critical habitat designation.

                                         The other thing that I'd add, is that because the outcome of consultation processes is almost always that the project gets to proceed albeit in somewhat modified form, you rarely have the kinds of complete wipe outs of value that ... as Mr. Bishop said ... you need to have in order to be successful, or complete, or close to complete wipe outs of value that you need to have to be successful as a takings plaintiff.

Dean Reuter:                   If we can fit a final question in here today.

Speaker 7:                       I think you were talking about some of the larger corporations earlier, but haven't a large number of individual owners of property around federal parks had their homes, and farms either disabled or completely taken. Some of the homes are even used by park service personnel as headquarters, and barracks, and things like that. Am I wrong about that?

Tim Bishop:                     Well, one of the ... you know, I don't know about those specific instances ... but, one of the points about [inaudible 00:58:40] County brief makes in this case, is that many of the Utah critical habitat for the sage-grouse, which covers a vast area of land carefully carves out the BLM, the federally owned land out of the critical habitat designation and just hits the private landowners, and it has designated critical habitat for the grouse tens of thousands of acres of land that is not sage brush, which is what the grouse depends on, but that is farmed land. I think that's an example of both the sort of gerrymandering that the federal government can engage in to put the burden on private landowners. Also, another example of private land that really is not habitat, doesn't have the sage brush the grouse needs, being designated as critical habitat, and limiting what the landowners can do on their property.

Speaker 7:                       The landowners who would have just a home on that property, which the park service covets, they generally don't have the resources to do the kind of fight that the large corporations do, and in a sense it becomes a taking without due process.

Professor Owen:             Just to interject, I think what you are describing sounds like the park service's policy of taking bi-eminent domains, so with compensation paid in holdings within national parks, so in other words, the park service if there are isolated plots of private land within a national park, the park service over time will try to convert those to federal ownership, but that has nothing to do with the Endangered Species Act. That's a different statute and when the park service does that, it is generally either by ... typically by taking the future rights. In other words, the inheritant rights in the property, and then paying fair market value for them.

Dean Reuter:                   Final thought from our guests. We're out of time, but I'll give each of you 60 seconds or so to wrap up. Professor Owen?

Professor Owen:             Yeah. I think one broader point about ... not just this case, but the Endangered Species Act generally that I think often gets missed in these debates is how transactional this area of practice actually is, and how the vision that I think a lot of us as lawyers are educated in, and have when we read about this case is that the Fish and Wildlife saying no, or the Army Corps of Engineers just saying no, you can't do this. The briefs in this case play up that vision.

                                         One of the things I've learned through my own research, and then through a lessor extent through my own practice, is that the way things actually work on the ground is typically ... with the Endangered Species Act and other statutes ... they're largely deal making statutes that lead to adjustments in the ways that projects proceed, but that still allow them to go forward. You can be frustrated with the amount of leverage that either private property owners or the government have in those negotiations, and certainly the negotiations aren't cheap. They take time, but ultimately, I think we ought to be focusing a little bit less on the idea they're some massive prohibition arising from the federal government creating critical habitat as a designation for something else, and realize what's actually going on out there in the real world is just a lot of negotiation over how projects will proceed that ultimately allows projects to go forward, and also leads to adjustments that are more protective of the environment.

                                         Critical habitat designations are part of that story. There are things that I think we can definitely improve about that process, but the sort of broad side attack on critical habitat that you see in this case I don't think is very constructive.

Dean Reuter:                   Final thought [crosstalk 01:03:06] Tim Bishop.

Tim Bishop:                     I think that very nicely illustrates the ... how very different the view point of my clients and the amici in this case is about transactions with the government. I've spent a lot of my career transacting with the government in the Clean Water context, and it's not pretty for the landowner. It's costly. It's time consuming. The permit process is incredibly expensive, incredibly burdensome. The government always takes something out of your ... of what you own, and have paid for, and doesn't give anything back. It's our position that Congress gets to set the rules by which the agencies have to live, and that if Congress says that the landowner doesn't even get involved in this whole transactional process is the first place, because the agency doesn't have the power to act, that's the end of it. That's what this case is about.

                                         This case is about whether the word habitat in the statute restricts the agency's power to private land that actually is habitat for the listed creature. If it isn't habitat for the listed creature, the transactional process that Professor Owen has talked about is irrelevant, and we never get there, and that's what we are hoping that the Court will take this case to decide here. Thank you.

Dean Reuter:                   Well, this is Dean Water. I want to thank both of our guests. This has been an elucidating discussion. Again, the conference is on Friday. We'll look for results thereafter. Could be held over. Could be granted cert right away or denied right away, but I hope that we're able to entice both of gentlemen back for a teleforum call in the future on this case, or another case for that matter.

                                         I want to thank our audience as well for dialing in, for your thoughtful questions. A reminder to check our website and monitor your emails for upcoming teleforum conference calls, but until the next call, we are adjourned. Thank you very much, everyone.

 

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