New Developments and the Supreme Court

Cartoon by Signe Wilkinson

Two weeks ago, the National Audubon Society reported that many common birds are in steep decline. (I discussed the report here; more discussion at 10000Birds.) The report cited several causes for species decline, one of which was the transformation of former habitat into suburban developments. This presents a difficult problem for conservationists. Development tends to happen in little chunks - a hundred acres here, a thousand acres there. Most individual projects are too small to present a serious harm in themselves, and so their impact escapes serious scrutiny. Taken together over a few decades, the many individual projects contribute to a radical transformation of the landscape. Environmental regulations at least provide a way to mitigate or stop entirely certain egregious cases, like the Blackwater development.

The task may now be more difficult thanks to a recent Supreme Court decision, National Association of Home Builders v. Defenders of Wildlife. The ruling was released on Monday but seems to have been lost in the media and blogosphere discussion over BONG HiTS 4 JESUS and several other First Amendment cases. According to SCOTUSblog, the decision centered on how to resolve an apparent conflict between the Clean Water Act and the Endangered Species Act.

Under CWA, the EPA may issue permits that allow discharge of identified pollutants into waterways. This program, known as the National Pollution Discharge Elimination System (NPDES), represents the most important administrative implementation of the CWA’s standards for water safety and quality. Under the statute, states are free to adopt their own equivalents of NPDES, and indeed most have already done so. CWA provides that the EPA “shall” transfer permit-issuing authority to a state if it meets nine statutory criteria which, taken together, establish that the state has authority under its own laws to administer an NPDES-type system. Unfortunately for Arizona, whose application for permit authority gave rise to this litigation, Section 7(a)(2) of another landmark environmental statute, the ESA, mandates that each federal agency “shall,” through consultation with the Secretary of the Interior, “insure that any action authorized, funded or carried out by such agency…is not likely to jeopardize” an endangered or threatened species, or the species’ habitat. Accordingly, EPA checked with the Fish and Wildlife Service, which raised concerns about possible harm to endangered species following permit authority transfer to Arizona. EPA then took the position that it could use only the nine CWA criteria to decide whether to transfer permitting authority. On this view, if EPA finds that all nine criteria are satisfied, authority transfer becomes entirely non-discretionary. EPA reasoned (and the FWS eventually agreed) that, following an authority transfer that it had no discretion to deny, it could not be found a legally relevant cause of any harm to endangered species.

[...]

Depending on how you read the statutes, their two “shalls” may well conflict, and the EPA and Defenders of Wildlife have taken different positions on how the conflict should be resolved. In its brief and at oral argument, EPA asserted that the ESA’s so-called “no-jeopardy” provision only applies to discretionary actions. The agency reads CWA to mandate approval of a state’s application if the state has met only CWA’s nine criteria – without regard to any further restrictions imposed by the ESA, including the “no-jeopardy” requirement. At this point, consultation with the relevant Interior agency either becomes a formality or simply isn’t required. EPA took the latter position in its brief and conceded the former at oral argument, agreeing with Chief Justice Roberts that the agency has characterized ESA consultation as, in the Chief’s words, “a waste of time.”

That’s one way to avoid a conflict between these two federal statutes. But according to Defenders of Wildlife – and, more importantly, to the Ninth Circuit – it’s not the correct way. The Ninth Circuit held that EPA’s need to “authorize” Arizona’s application was, by itself, sufficient to trigger the no-jeopardy requirement from the ESA. As the Ninth Circuit put it, “compliance with a ‘complementary’ statute cannot relieve the EPA of its obligations” under the ESA. In its brief and at oral argument, Defenders of Wildlife brought out a more forceful version of this same point, characterizing the ESA provision at issue as a “flat ban” on agency action that could harm endangered species or their habitats and noting that the ESA creates a process for resolving conflicts between this ban and agency action under other statutes.

The Court ruled 5-4 in favor of the NAHB and the EPA's interpretation, and against that of Defenders of Wildlife. (It is sad that the EPA and the Defenders of Wildlife would stand as adversaries before the Supreme Court, but such is life in the early 21st century.) This ruling seems to open a loophole for other federal agencies to assert that they, too, need not adhere to section 7 of the Endangered Species Act. The section applies to many aspects of the federal government - transportation, public lands, and military bases, to name a few. If an agency could make a case that its actions were non-discretionary, then it will probably find a sympathetic ear in the federal court system even if the actions conflict with the requirements of the Endangered Species Act.

As you might guess from decision's title, this specific case applies to development. The state wanted to issue water discharge permits for building projects.

At the center of the fight is the decision of the EPA to let DEQ issue permits for water discharge. That mainly affects the more than 20,000 general permits issued every year every time a developer wants to bulldoze property in any way that it will affect storm water runoff.

The Defenders of Wildlife sued, noting that federal laws and rules require the EPA to get input from other federal agencies, like the U.S. Fish and Wildlife Service, about potential harm to species before issuing permits. But when EPA transferred its authority to DEQ, the federal agency imposed no such requirement on the state.

In its 2005 ruling, the appellate court said the requirement of the EPA to consult with other agencies -- something not required of DEQ -- is critical. Appellate Judge Marsha Berzon this [sic] has led to measures protecting various endangered species, including the Pima pineapple cactus, the razorback sucker and the cactus ferruginous pygmy owl.

Arizona's Department of Environmental Quality still needs to consider the environmental impacts of the permits it issues. However, state regulations are less stringent than the Endangered Species Act, and state law limits what the state agency can consider when granting permits. The net result is that it will be harder to protect Arizona's endangered species, as well as other species that share the same habitat. When that happens, we all lose.