Spirit of the Sage Council v. Kempthorne

MEMORANDUM OPINION

Native American and environmental organizations and their members have brought this action challenging the validity of two federal rules under the Endangered Species Act (“ESA”), the No Surprises Rule and Permit Revocation Rule (“PRR”, collectively “the Rules”), which were promulgated by the Fish and Wildlife Service (“FWS”) and National Marine Fisheries Service (“NMFS”, collectively “the Services”). In 2003 and 2004, the Court ruled that the PRR had been promulgated without providing adequate opportunity for public comment, remanded the Rules to the agencies, ordered the Services to complete the proceedings upon remand within one year, and enjoined use of the Rules in the interim. The Services have now complied with the required procedures and repromulgated the PRR. Pending before the Court are the parties’ cross-motions for summary judgment, which dispute both this Court’s jurisdiction as well as the merits of plaintiffs’ claims under the Administrative Procedures Act (“APA”). Upon consideration of the motions and supporting memoranda, the responses and replies thereto, the applicable law, the arguments made at the motions hearing on May 30, 2007, and the entire record, the Court determines that the it has jurisdiction and that the Rules are lawful under the APA. Therefore, for the reasons stated herein, plaintiffs’ motion for summary judgment is DENIED, and defendants’ motion for summary judgment is GRANTED.

BACKGROUND

A. Factual and Regulatory Background

The background of the parties and the statutory framework was discussed in detail in the Court’s 2003 opinion, Spirit of the Sage Council v. Norton, 294 F.Supp.2d 67, 73-80 (D.D.C.2003) (hereinafter “Spirit /”), and need only be summarized here. Plaintiffs are a number of organizations who allege that their members regularly photograph, observe, study and otherwise enjoy endangered and threatened species and their habitats. Id. at 73-74. FWS and NMFS are agencies within the Department of the Interior and Department of Commerce respectively, which have been delegated the responsibilities under the ESA. Id. at 75. Two additional parties, the Western Urban Water Coalition and a group of California local governments, have been granted leave to intervene as defendants. Id.

Section 9 of the ESA, with certain statutory exceptions, makes it unlawful for any person to “take” a member of any species listed as endangered or threatened. Id. at 75-76. In 1982, Congress amended the ESA to authorize the Services to permit otherwise prohibited takings of endangered or threatened species, if they are “incidental to, and not the purpose of, the carrying out of an otherwise lawful activity.” Id. at 76 (quoting 16 U.S.C. § 1539(a)(1)(B)). Incidental take permits (“ITP”) are available to landowners and developers who agree to mitigate impacts to listed species through a Habitat Conservation Plan (“HCP”), which must satisfy both ESA statutory criteria and further requirements in the Services’ regulations. Id.

Under Section 10 of the ESA, an applicant seeking an ITP authorizing it to “take” endangered or threatened species *36 in the course of its activities on private land must prepare a HCP specifying, inter alia, the impact of the taking, measures to minimize the impact, and any other measures required by the Services. 16 U.S.C. § 1539(a)(2)(A). In order to issue an ITP, the Services “must find that the taking will be incidental; the applicant will, to the maximum extent practicable, minimize and mitigate the impacts of such taking; the applicant will ensure that adequate funding for the plan will be provided; [and] the taking will not appreciably reduce the likelihood of the survival and recovery of the species in the wild.” 16 U.S.C. § 1539(a)(2)(B).

In 1994, the government announced the “No Surprises” policy, which required Services approving ITPs to provide landowners with “assurances” that once an ITP was approved, even if circumstances subsequently changed in such a way as to render the HCP inadequate to conserve listed species, the Services would not impose additional conservation and mitigation requirements that would increase costs or further restrict the use of natural resources beyond the original plan. Spirit I, 294 F.Supp.2d at 77. Despite numerous objections, the Services promulgated a final No Surprises Rule, which essentially codified the No Surprises policy. Id. at 78. The new rule provides that “no additional land use restrictions or financial compensation will be required of the permit holder with respect to species covered by the permit, even if unforeseen circumstances arise after a permit is issued indicating that additional mitigation is needed for a given species covered by a permit.” Id. (quoting No Surprises Rule, 63 Fed. Reg. 8859, 8863 (Feb. 23, 1998), codified at 50 C.F.R. §§ 17.22, 17.32). In the first decade following the enactment of Section 10 of the ESA, only 14 ITPs were issued, but between 1994 and 2002, 379 ITPs with No Surprises assurances have been issued, covering approximately 30 million acres and affecting more than 200 endangered or threatened species. Id. at 79.

While this Court was considering the original motions for summary judgment in this case, the FWS promulgated the Permit Revocation Rule (“PRR”). Id. The PRR amends the regulations specifically applicable to ITPs, which now include the No Surprises Rule, and provides, in pertinent part, that an ITP “may not be revoked ... unless continuation of the permitted activity would be inconsistent with the criterion set forth in 16 U.S.C. § 1539(a)(2)(B)(iv) and the inconsistency has not been remedied [by the Services] in a timely fashion.” Id. (quoting Safe Harbor Agreements and Candidate Conservation Agreements With Assurances, 64 Fed. Reg. 32,706, 32,712-14 (Jun. 17, 1999), codified at 50 C.F.R. §§ 17.22(b), 17.32(b)). 16 U.S.C. § 1539(a)(2)(B)(iv) sets forth, as one of the conditions for issuance of an ITP, that “the taking will not appreciably reduce the likelihood of the survival and recovery of the species in the wild.” Id. at 79 n. 2. 1 In effect, the PRR specifies that the Services will not revoke an ITP unless continuation of the permit puts a listed species in jeopardy of extinction. See id. at 86.

B. Procedural History

Before the Court in 2003 were plaintiffs’ arguments that the No Surprises Rule and PRR violated the ESA and APA. Id. at 80. As an initial matter, the Court held that the plaintiffs had standing to bring their claims because the “plaintiffs’ assertion of harm arising from the substantial and unprecedented increase in the number of *37 ITPs sought and issued since the advent of the No Surprises Rule is sufficient to establish injury in fact.” Id. at 82; see also id. at 82-83 (holding that plaintiffs met the causation and redressability prongs of the standing test based on that harm). The Court also concluded that plaintiffs’ claims were ripe because they presented purely legal challenges to the Rules and there was no substantial reason to await further factual development of the issues. Id. at 83-85.

On the merits, the Court held that the PRR was promulgated in violation of the APA’s procedural requirements. Id. at 85. Finding the PRR to be a substantive rule, the Court concluded that it was promulgated without the notice and comment required by the APA. Id. at 85-91. The Court thus did not need to reach plaintiffs’ substantive challenges to the PRR, but vacated the PRR and remanded the rule for public notice and comment. Id. at 90-91. The Court further found that the No Surprises Rule was “sufficiently intertwined” with the PRR so that it also had to be remanded to the agency for reconsideration with the PRR without further inquiry into its substantive validity. Id. at 91. The Court later issued an order requiring the Services to complete the proceedings on remand within one year, and to refrain from approving new ITPs containing “No Surprises” assurances pending completion of those proceedings. Order (June 10, 2004).

The Services appealed the Court’s final order, arguing that the interim suspension of the No Surprises Rule and the one-year deadline for repromulgation of the PRR exceeded the Court’s authority under the APA. Spirit of the Sage Council v. Norton, 411 F.3d 225, 226-27 (D.C.Cir.2005) (hereinafter “Spirit II”). After the D.C. Circuit denied the Services’ motion for a stay pending appeal, the FWS solicited public comment on both the PRR and its relationship to the No Surprises Rule, as ordered by the Court. Id. at 228. In December 2004, the FWS repromulgated the PRR without substantial change. Id. (citing ESA ITP Revocation Regulations — Final Rule, 69 Fed.Reg. 71,723 (Dec. 10, 2004)).

The D.C. Circuit agreed with plaintiffs that the Services’ appeal was moot because the Services fully complied with this Court’s orders. Id. at 227. The Circuit thus did not address this Court’s rulings that the plaintiffs had standing and that their claims were ripe for judicial review. Id. at 230. The court instead only dismissed the appeal as moot, vacated the orders that were appealed, and remanded the case for further proceedings before the Court. Id.

On remand, plaintiffs and defendants have both filed motions for summary judgment. Plaintiffs contend that the PRR and No Surprises Rule contravene the ESA and are arbitrary and capricious under the APA. In their motion, defendants initially contend that plaintiffs lack standing and that their claims are not ripe for review. On the merits, defendants argue that the PRR and No Surprises Rule are reasonable constructions of the ESA, and that the Services’ explanations of the rules comply with the APA. The intervenor-defendants have also filed a brief in support of the Services’ arguments.

STANDARD OF REVIEW

Summary judgment should be granted only if the moving party has shown that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986); Waterhouse v. Dist. of Columbia, 298 F.3d 989, 991 (D.C.Cir.2002). In determining whether a genuine issue of *38 material fact exists, the Court must view all facts in the light most favorable to the non-moving party. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The non-moving party’s opposition, however, must consist of more than mere unsupported allegations or denials and must be supported by affidavits or other competent evidence setting forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e); see Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548.

ANALYSIS

1. Ripeness

Defendants argue that plaintiffs’ claims are not ripe because the legality of the Rules can only be determined in a challenge to a specific permit decision, where a court can assess whether an entire ITP complies with the ESA. 2 Plaintiffs’ first response is that defendants’ jurisdictional arguments should be rejected following the Court’s prior decision under the “law of the ease” doctrine. Plaintiffs also contend that recent precedent further demonstrates that the Court’s conclusions on jurisdiction were correct.

“The ‘mandate rule,’ an application of the ‘law of the case’ doctrine, states that a district court is bound by the mandate of a federal appellate court and generally may not reconsider issues decided on a previous appeal.” United States v. Ins. Co. of N. Am., 131 F.3d 1037, 1041 (D.C.Cir.1997). Since the Court of Appeals specifically did not address the questions of standing and ripeness, see Spirit II, 411 F.3d at 230, the Court is not bound by the law of the case in this sense. With regard to the Court’s own prior decisions in this case, the law of the case doctrine leaves discretion for the Court to reconsider its decisions prior to final judgment. Horn v. United States Dep’t of Army, 284 F.Supp.2d 1, 7 n. 9 (D.D.C.2003). The doctrine instructs, however, that “where litigants have once battled for the court’s decision, they should neither be required, nor without good reason permitted, to battle for it again.” Singh v. George Washington Univ., 383 F.Supp.2d 99, 101 (D.D.C.2005).

“Ripeness requires [the Court] to evaluate (1) the fitness of the issues for judicial decision and (2) the hardship to the parties of withholding court consideration.” Nat’l Park Hospitality Ass’n v. Dep’t of the Interior, 538 U.S. 803, 808, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003). In considering fitness for review, claims that present “purely legal” questions are presumptively reviewable. Nat’l Min. Ass’n v. Fowler, 324 F.3d 752, 756-57 (D.C.Cir. 2003). As in 2003, defendants rely on National Park Hospitality to argue that challenges to agency regulations are not ripe until the regulations have been applied concretely, and thus the Rules at issue here must be reviewed in the context of a specific ITP. The Court previously rejected this argument, distinguishing this case because the Rules currently bind the Services and vest third parties with regulatory rights. Spirit I, 294 F.Supp.2d at 85. Were this defendants’ only argument, the Court would reject it again on the grounds that there is no “good reason” to upset the law of the case. Defendants, *39 however, have made additional arguments based on cases decided since 2003.

Defendants point to a recent decision from the Ninth Circuit, Earth Island Institute v. Ruthenbeck, 459 F.3d 954 (9th Cir.2006). At issue in that case were plaintiffs challenges to nine regulations that govern review of decisions implementing forest plans, on the grounds that the regulations were manifestly contrary to the governing statute. Id. at 957-58. The court held that because only one of the regulations had actually been applied to a proposed project, only that regulation was ripe for review. Id. at 958. The court essentially held that regulations could not be challenged until “its factual components [are] fleshed out, by some concrete action applying the regulation.” Id. at 962 (quoting Lujan v. Nat’l Wildlife Fed., 497 U.S. 871, 891, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990)). While this principle would bar plaintiffs’ claims in this case, it is not law of this circuit.

Contrary to the Ninth Circuit, the D.C. Circuit has held that “a purely legal claim in the context of a facial challenge ... is presumptively reviewable.” Nat’l Ass’n of Home Builders v. U.S. Army Corps of Eng., 440 F.3d 459 464 (D.C.Cir.2006). In that case, plaintiffs had facially challenged a regulation promulgated under the Clean Water Act. Id. at 461. The regulation governed when permits to discharge dredged or fill material into navigable waters were required. Id. Contrary to the district court, the D.C. Circuit found that plaintiffs claims were ripe for review, even though they were not applied challenges to a project-specific agency decision. Id. at 464. “While the final determination of whether to require a permit in a given case will, as is usual in an agency adjudication, rest on case-specific findings, this fact does not diminish the fitness of [the regulation] for review.” Id. Plaintiffs alleged that two features of the regulation exceeded the statutory authority to issue the regulation. Id. at 463-64. The court held that the “legality vel non of the two challenged features will not change from case to case or become clearer in a concrete setting.” Id. at 464. In addition, the court noted that plaintiffs claim “rests not ‘on the assumption that the agency will exercise its discretion unlawfully’ in applying the regulation but on whether ‘its faithful application would carry the agency beyond its statutory mandate.’ ” Id. at 465 (quoting Nat’l Mining Ass’n v. U.S. Army Corps of Eng’rs, 145 F.3d 1399, 1408 (D.C.Cir.1998)).

In this case, plaintiffs claim that the PRR and No Surprises Rule facially contravene the ESA and that the Services have not articulated any rationale for the Rules consistent with the ESA. As in Home Builders, plaintiffs are facially challenging regulations that will govern fact-specific permitting decisions outside the context of a particular permit. With these types of claims, the “legality vel non of the” Rules “will not change from case to case of become clearer in a concrete setting.” See id. at 464. Plaintiffs are also alleging that faithful application of the rules would carry the Services beyond the ESA’s boundaries, and not are relying on the agency’s misuse of its discretion. See id. at 465. Therefore, under Home Builders, plaintiffs’ claims are ripe for review.

Another recent D.C. Circuit decision complicates this framework, but also supports this conclusion. In National Treasury Employees Union v. Chertojf, 452 F.3d 839 (D.C.Cir.2006) (hereinafter “NTEU”), plaintiffs challenged regulations establishing a human resources management system for the Department of Homeland Security. Id. at 843^4. One set of rules allowed the agency to override collective bargaining agreements in certain ar *40 eas and limit the scope of agreements. Id. at 846-48. Defendants argued that facial challenges to these rules were not ripe because the agency may never exercise its discretion to override a collective bargaining agreement. Id. at 854. Nonetheless, the court found the challenges to be ripe because the mere threat of override damaged the collective bargaining process, and because the rules limiting the scope of agreements required no further action by the agency. Id. The court thus found the facial and purely legal challenges to be presumptively and actually renewable. Id. at 854-55. Another set of rules specified the role of the Merit Systems Protection Board (“MSPB”) in reviewing appeals of certain employer actions. Id. at 850. The court found that a facial and purely legal challenge to these rules was not ripe because review would be aided by case-specific facts and “[pjroblems with MSPB’s review will arise only after DHS has disciplined an employee and the penalty has been appealed.” Id. at 855.

Plaintiffs’ claims in this case are more closely akin to the claims against the collective bargaining provisions in NTEU than the claims against the MSPB provisions. Like the former, the claims here attack regulations that have a direct and immediate effect on the Services and regulated third parties. The PRR immediately prevents the Services from revoking an existing ITP in certain situations. Thus, there would be no further action by the agency to challenge. See id. at 854. Unlike the MSPB rules in NTEU, which come into play only on appeal, plaintiffs here challenge rules that already have a direct effect on the Services — the PRR directly limits the Services’ power to revoke existing permits and the No Surprises Rule directly constrains what types of ITPs the Services can further grant. Therefore, any legal flaws in the Rules arise immediately. Cf. id. at 855. Accordingly, the Court concludes that plaintiffs’ claims are ripe for review.

II. Standing

In order to have Article III standing, plaintiffs must demonstrate: “(1) ‘injury in fact’ that is ‘concrete’ and ‘actual or imminent’, not ‘conjectural’ or ‘hypothetical;’ (2) causation, ‘a fairly traceable connection between the plaintiffs injury and the complained-of conduct of the defendant;’ and (3) redressability, ‘a likelihood that the requested relief will redress the alleged injury.’ ” Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 102-04, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). The Services argue that plaintiffs fail all three prongs of the standing test because plaintiffs’ injuries are not attributable to the Rules, but to the subsequent issuance of ITPs or other discretionary agency actions.

This is essentially the same argument considered by the Court in its 2003 decision. See Spirit I, 294 F.Supp.2d at 82 (stating that defendants argue that plaintiffs must challenge a specific ITP and that harm to plaintiffs from No Surprises Rule is purely speculative). The Court rejected this argument because “plaintiffs’ assertion of harm arising from the substantial and unprecedented increase in the number of ITPs sought and issued since the advent of the No Surprises Rule is sufficient to establish injury-in-fact.” Id. The Court also concluded that the PRR is intertwined with the No Surprises Rule because the conditions allowing for the revoking of ITPs has great bearing on whether the Services should authorize ITPs in the first place. See id. at 91. In addition, the fact that an agency may still in its discretion choose not to revoke a permit if the Court *41 strikes down the PRR does not defeat the redressability prong of standing. See FEC v. Akins, 524 U.S. 11, 25, 118 S.Ct. 1777, 141 L.Ed.2d 10 (1998).

Unlike their arguments on ripeness, defendants have not cited to any precedent decided since 2003, and do not point to any changed circumstances. Therefore, since parties should not have to battle for the same judicial decision again without good reason, the Court will follow the law of the case, and holds that plaintiffs have standing to bring their claims. See Singh, 383 F.Supp.2d at 101.

III. Whether the Rules are Contrary to the ESA

Plaintiffs’ primary argument is that the PRR contravenes the ESA, and therefore is not “in accordance with law” under the APA. See 5 U.S.C. § 706(2)(A). In determining whether an action is “in accordance with law” within the meaning of that provision, the court must apply the familiar framework established by Chevron U.S.A. Inc. v. Natural Res. Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Under “step one” of Chevron analysis, the court must ascertain whether Congress had a specific intent on the issue before the Court. Natural Res. Def. Council v. EPA, 194 F.3d 130,135 (D.C.Cir.1999). In doing so, the Comb must consider “ ‘the particular statutory language at issue, as well as the language and design of the statute as a whole.’ ” Halverson v. Slater, 129 F.3d 180, 184 (D.C.Cir.1997) (quoting K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 291, 108 S.Ct. 1811, 100 L.Ed.2d 313 (1988)). Only if the Court determines that Congress “has not spoken to the question at issue, does Chevron step two” ordinarily “come into play, requiring the court to defer to the agency’s reasonable interpretation of the statute.” South. Cal. Edison Co. v. FERC, 195 F.3d 17, 23 (D.C.Cir.1999).

The PRR significantly narrows the circumstances under which the Services may revoke ITPs. The court previously analyzed the change effected by the PRR:

Prior to promulgation of the PRR, the Services could revoke an ITP once “the population(s) of the wildlife or plant that is the subject of the permit declines to the extent that continuation of the permitted activity would be detrimental to maintenance or recovery of the affected population.” See 50 C.F.R. § 13.28(a)(5) (emphasis added). It appears beyond dispute that, following promulgation of the PRR, the Services can no longer revoke an ITP under these circumstances. 50 C.F.R. § 17.22 (An ITP “may not be revoked for any reason except those set forth in § 13.28(a)(1) through (4) or unless continuation of the permitted activity would be inconsistent with the criterion set forth in 16 U.S.C. 1539(a)(2)(B)(iv) and the inconsistency has not been remedied in a timely fashion.”). Instead, so long as “the taking will not appreciably reduce the likelihood of the survival and recovery of the species in the wild,” the permittee commits no procedural violations, and the law does not change, the PRR precludes the Services from revoking an ITP.

Spirit I, 294 F.Supp.2d at 86. Plaintiffs focus on the difference that the original revocation standard refers to 17 maintenance and recovery in the disjunctive, whereas the PRR requires a showing that both survival and recovery of a species must be threatened before an ITP can be revoked. See id. Thus, if activity under an ITP hinders the recovery of a species, but not its survival, then the Services are foreclosed from revoking the permit under the PRR.

*42 Plaintiffs argue that the PRR is contrary to the ESA under Chevron step one because the ESA as a whole and Section 10 in particular require measures that insure the survival and recovery of listed species. Plaintiffs’ argument is based on the definition of “conservation” under the ESA. The ESA defines “conservation” as all methods that can be employed to “bring any endangered species or threatened species to the point at which the measures provided pursuant to this [Act] are no longer necessary.” 16 U.S.C. § 1532(3). Conservation is thus “a much broader concept than mere survival,” and encompasses “recovery of a threatened or endangered species.” Sierra Club v. FWS, 245 F.3d 434, 441-42 (5th Cir.2001). “Indeed, in a different section of the ESA, the statute distinguishes between ‘conservation’ and ‘survival.’ ” Id. at 442 (citing 16 U.S.C. § 1533(f)(1)); see Gifford, Pinchot Task Force v. FWS, 378 F.3d 1059, 1070 (9th Cir.2004) (“By these definitions, it is clear that Congress intended that conservation and survival be two different (though complementary) goals of the ESA.”).

Under ESA Section 10, parties seeking an ITP must submit a “habitat conservation plan” (“HCP”) specifying the impact of the taking, measures to minimize the impact, and any other measures required by the Services. 16 U.S.C. § 1539(a)(2)(A). Plaintiffs argue that because this document is called a “conservation” plan, ITP holders must necessarily be required to “conserve” species, i.e. use all measures to promote species’ recovery. See 16 U.S.C. § 1532(3). It would follow then that ITPs should be revoked when the recovery of a species is imperiled. In addition, plaintiffs contend that the overall purpose of the ESA is to “halt and reverse the trend towards species extinction, whatever the cost.” TVA v. Hill, 437 U.S. 153, 184, 98 S.Ct. 2279, 57 L.Ed.2d 117 (1978) (emphasis added). Thus, the issuance and revocation of ITPs arguably should utilize a recovery-based standard.

If ESA Section 10 did not further define the components of an HCP and requirements for granting an ITP, plaintiffs may have had a strong claim. The more specific provisions of Section 10, however, fatally undermine plaintiffs’ arguments. Section 10 requires that an ITP applicant’s conservation plan must specify, inter alia, “the impact which will likely result from such taking” and “what steps the applicant will take to minimize and