National Association Of Home Builders v. Babbitt

The National Association of Home Builders of the United States, the Building Industry Legal Defense Fund, the County of San Bernardino, and the City of Colton, California brought this action in the United States District Court for the District of Columbia to challenge an application of section 9(a)(1) of the Endangered Species Act ("ESA"), 16 U.S.C. § 1538(a)(1), which makes it unlawful for any person to "take"--i.e., "to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or attempt to engage in any such conduct," 16 U.S.C. § 1532(19)--any endangered species. The plaintiffs sought a declaration that the application of section 9 of the ESA to the Delhi Sands Flower-Loving Fly ("the Fly"), which is located only in California, exceeds Congress' Commerce Clause power and an injunction against application of the section to the plaintiff's construction activities in areas containing Fly habitat.

This dispute arose when the Fish and Wildlife Service ("FWS") placed the Fly, an insect that is native to the San Bernardino area of California, on the endangered species list. The listing of the Fly, the habitat of which is located entirely within an eight mile radius in southwestern San Bernardino County and northwestern Riverside County, California, forced San Bernardino County to alter plans to construct a new hospital on a recently purchased site that the FWS had determined contained Fly habitat. The FWS and San Bernardino County agreed on a plan that would allow the County to build the hospital and a power plant in the area designated as Fly habitat in return for modification of the construction plans and purchase and set aside of nearby land as Fly habitat. In November 1995, FWS issued a permit to allow construction of the power plant. During the same month, however, the County notified the FWS that it planned to redesign a nearby intersection to improve emergency vehicle access to the hospital. The FWS informed the County that expansion of the intersection as planned would likely lead to a "taking" of the Fly in violation of ESA section 9(a). After brief unsuccessful negotiations between the County and FWS, the County filed suit in district court challenging the application of section 9(a)(1) to the Fly.

The district court held that application of section 9(a)(1) of the Endangered Species Act to the Fly is a valid exercise of Congress' power pursuant to the Commerce Clause. Accordingly, the court entered summary judgment on behalf of the government. See National Association of Home Builders v. Babbit, 949 F.Supp. 1, 2 (D.D.C.1996). Because we also find that the application of section 9(a)(1) of the Endangered Species Act to the Fly does not exceed Congress' Commerce Clause power, we affirm the district court's decision to grant the government's motion for summary judgment.1

The Delhi Sands Flower-Loving Fly, which lives only in the "Delhi series" soils found in southwestern San Bernardino County and northwestern Riverside County, California, is the only remaining subspecies of its species. The other subspecies, the El Segundo Flower-Loving Fly, is believed to be extinct due to destruction of its habitat through urban development. See Brief of Amici Curiae Center for Marine Conservation, Defenders of Wildlife, Environmental Defense Fund, National Audubon Society, and World Wildlife Fund ("Brief of Amici Curiae for Appellees") at 4. The Fly is also one of only a few North American species in the "mydas flies" family and one of only a few species in that family that visit flowers in search of nectar, thereby pollinating native plant species. See id. at 1.

Over 97 percent of the historic habitat of the Fly has been eliminated, and, prior to its listing as endangered, its remaining habitat was threatened by urban development, unauthorized trash dumping, and off-road vehicle use. See Endangered and Threatened Wildlife and Plants; Determination of Endangered Status for the Delhi Sands Flower-Loving Fly, 58 Fed.Reg. 49,881, 49,885 (1993) (codified at 50 C.F.R. pt. 17). There are currently 11 known populations of the Fly, all of which occur within an eight mile radius of one another. See Declaration of Christopher D. Nagano (Apr. 30, 1996) at p 14 ("Nagano Declaration"). The size of the entire population of Flies was recently estimated in the low hundreds. See U.S. Fish and Wildlife Service, Technical/Agency Draft Recovery Plan for the Delhi Sands Flower-Loving Fly 12 (1996).

In 1990, after receiving two petitions asking that the Fly be placed on the endangered species list, the FWS began an investigation into whether listing of the Fly as endangered was warranted. Soon thereafter, the FWS found that substantial information had been presented to indicate that the Fly was an endangered species. Two years later, the FWS published its final determination that the Fly is "in imminent danger of extinction due to extensive habitat loss and degradation that has reduced its range by 97 percent." 58 Fed.Reg. at 49,881. The listing of the Fly as endangered triggered the automatic statutory prohibitions of section 9(a)(1) of the ESA, 16 U.S.C. § 1538(a)(1). As a result, commercial trade in the species could no longer occur lawfully and no person could "take" individuals of the species without a permit or an exemption.

For several years prior to the listing of the Fly as endangered, the County of San Bernardino had been planning to build a $470 million earthquake-proof "state of the art" hospital to serve as the central emergency medical center for the San Bernardino County area in the event of an earthquake and to serve as a primary burn care center and teaching facility. In July 1992, two years after the FWS had published its notice that sufficient information had been presented to justify listing the Fly as endangered but before the Fly was actually so listed, the Board of the new San Bernardino County hospital acquired the final site parcels for the hospital. The 76-acre site that the board acquired contained habitat of the Fly.

In November 1992, the FWS notified the County that the Fly was likely to be listed as endangered, and in May 1993--after the Fly was listed--the FWS advised the County that the hospital site was occupied by the Fly and that construction of the facility as then proposed would likely "take" members of the species in violation of the ESA. The County decided to modify the layout and design of the hospital to eliminate direct and indirect impacts to the Fly and to eliminate the need for a section 10 "incidental take permit."2 One of the modifications to the original design for the hospital included in the plan was to move the hospital 250 feet north to "avoid[ ] direct impact to the entire area identified as occupied or suitable Delhi Fly habitat." Habitat Preservation, Habitat Enchangement [sic] and Impact Avoidance Plan for the Delhi Sands Flower-Loving Fly at the San Bernardino County Hospital Replacement Site 8 (Dec. 1, 1993). This resulted in an 8.35 acre Delhi Fly habitat preserve. Id. The plan also created a 100-foot wide corridor to link two Fly habitat areas and permit interbreeding between Fly colonies.

In October 1994, the County approached FWS with a proposal to construct a substation to power the hospital on "the best remaining habitat" for the Fly. See Declaration of Jeffery M. Newman 8 (Apr. 29, 1996) ("Newman Declaration"). The County submitted an application for incidental "take" of the Fly, which would permit it to build on about 4 acres of Fly habitat. To offset this reduction in Fly habitat, the County proposed to acquire and manage a nearby 7.5 acre site as Fly habitat. In November 1995, the FWS issued the section 10 permit for the substation and construction began shortly thereafter. See id. at 9.

In November 1995, the County informed FWS of its plans to redesign an intersection near the hospital that the County argues is critical to emergency vehicle access to the new hospital. The FWS determined that the plan, which called for a reduction of the 100 foot wide corridor to an 18 foot wide corridor, a reduction of 70 to 80 percent, would "greatly reduce, if not effectively eliminate, the entire corridor area set aside as a critical part of the County's efforts to avoid a take" of the Fly. Newman Declaration at 7. The FWS advised the County that the redesign of the intersection would probably cause a "take" of the Fly in violation of section 9 of the ESA.

On October 20, 1995, the National Association of Home Builders of the United States, the Building Industry Legal Defense Fund, the County of San Bernardino, and the City of Colton, California filed a complaint seeking a declaration that the taking prohibition of section 9 of the ESA was unconstitutional as applied to "takes" of the Fly and asking for an injunction barring application of the provision. An amended complaint later added the California Building Industry Association and the City of Fontana as plaintiffs. On December 6, 1996, the district court granted the government's motion for summary judgment. See National Association of Home Builders, 949 F.Supp. 1. This appeal ensued.

Appellants challenge the application of section 9(a)(1) of the ESA, which makes it unlawful for any person to "take any [endangered or threatened] species within the United States or the territorial sea of the United States," 16 U.S.C. § 1538(a)(1), to the Delhi Sands Flower-Loving Fly. See also Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 515 U.S. 687, 115 S.Ct. 2407, 132 L.Ed.2d 597 (1995) (upholding agency's interpretation of the term "take" to include significant habitat degradation). Appellants argue that the federal government does not have the authority to regulate the use of non-federal lands in order to protect the Fly, which is found only within a single state. Indeed, they claim that "the Constitution of the United States does not grant the federal government the authority to regulate wildlife, nor does it authorize federal regulation of nonfederal lands." Brief for Appellants at 17.

The district court held that the application of section 9(a)(1) of the ESA to the Fly is constitutional. It concluded that the federal government's "limited and enumerated" powers include the power to regulate wildlife and non-federal lands that serve as the habitat for endangered species. The court also concluded that the ESA provides for a regulatory scheme that is within the bounds of Congress' power under the Commerce Clause. The district court thus granted the government's motion for summary judgment. We affirm the district court's decision.

Appellants' Commerce Clause challenge to the application of section 9(a)(1) of the ESA to the Fly rests on the Supreme Court's decision in United States v. Lopez, 514 U.S. 549, 115 S.Ct. 1624, 131 L.Ed.2d 626 (1995). In Lopez, the Court held that the Gun-Free School Zones Act of 1990, 18 U.S.C. § 922(q), which made possession of a gun within a school zone a federal offense, exceeded Congress' Commerce Clause authority. Drawing on its earlier Commerce Clause jurisprudence, see especially Perez v. United States, 402 U.S. 146, 150, 91 S.Ct. 1357, 1359-60, 28 L.Ed.2d 686 (1971), the Lopez Court explained that Congress could regulate three broad categories of activity: (1) "the use of the channels of interstate commerce," (2) "the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities," and (3) "those activities having a substantial relation to interstate commerce ... i.e., those activities that substantially affect interstate commerce." Lopez, 514 U.S. at 558-59, 115 S.Ct. at 1629-30 (citations omitted). Possession of a gun within 1000 feet of a school, the Court explained, clearly did not fit the first two categories. In addition, it could not be regulated under the third category as an activity that "substantially affects" interstate commerce because it was not commercial in nature and was not an essential part of a larger regulation of economic activity. Moreover, the Court explained, Congress had made no findings about the effect of gun possession in school zones on interstate commerce. Thus, concluding that Congress had no rational basis for finding that gun possession within school zones had a substantial effect on interstate commerce, the Court declared the statute unconstitutional. See id. at 567-68, 115 S.Ct. at 1633-34.

It is clear that, in this instance, section 9(a)(1) of the ESA is not a regulation of the instrumentalities of interstate commerce or of persons or things in interstate commerce. As a result, only the first and the third categories of activity discussed in Lopez will be examined. In evaluating whether ESA section 9(a)(1) is a regulation of the use of the channels of interstate commerce or of activity that substantially affects interstate commerce, we may look not only to the effect of the extinction of the individual endangered species at issue in this case, but also to the aggregate effect of the extinction of all similarly situated endangered species. As the Lopez Court explained, " 'where a general regulatory statute bears a substantial relation to commerce, the de minimis character of individual instances arising under the statute is of no consequence.' " Lopez, 514 U.S. at 558, 115 S.Ct. at 1629 (quoting Maryland v. Wirtz, 392 U.S. 183, 196 n. 27, 88 S.Ct. 2017, 2024 n. 27, 20 L.Ed.2d 1020 (1968), overruled on other grounds, National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976), overruled by Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528, 105 S.Ct. 1005, 83 L.Ed.2d 1016 (1985) (first emphasis added)). If a statute regulates "a class of activities ... within reach of the federal power," Perez, 402 U.S. at 154, 91 S.Ct. at 1361, the courts have "no power 'to excise, as trivial, individual instances' of the class," id. Because section 9(a)(1) of the ESA regulates a class of activities--takings of endangered species--that is within Congress' Commerce Clause power under both the first and third Lopez categories, application of section 9(a)(1) to the Fly is constitutional.3

Application of section 9(a)(1) of the ESA to the Fly can be viewed as a proper exercise of Congress' Commerce Clause power over the first category of activity that the Lopez Court identified: the use of the "channels of interstate commerce." Lopez, 514 U.S. at 558, 115 S.Ct. at 1629. Although this category is commonly used to uphold regulations of interstate transport of persons or goods, it need not be so limited. Indeed, the power of Congress to regulate the channels of interstate commerce provides a justification for section 9(a)(1) of the ESA for two reasons. First, the prohibition against takings of an endangered species is necessary to enable the government to control the transport of the endangered species in interstate commerce. Second, the prohibition on takings of endangered animals falls under Congress' authority " 'to keep the channels of interstate commerce free from immoral and injurious uses.' " Id. (quoting Heart of Atlanta Motel Inc. v. United States, 379 U.S. 241, 256, 85 S.Ct. 348, 356-57, 13 L.Ed.2d 258 (1964)).4

The ESA's prohibition on takings of endangered species can be justified as a necessary aid to the prohibitions in the ESA on transporting and selling endangered species in interstate commerce. In this sense, the prohibition against takings of endangered species is analogous to the prohibition against transfer and possession of machine guns (including purely intrastate possession) of 18 U.S.C. § 922(o), which has been upheld by the Fifth, Sixth, Ninth, and Eleventh Circuits as a regulation of the channels of interstate commerce. In United States v. Rambo, 74 F.3d 948, 951 (9th Cir.), cert. denied, --- U.S. ----, 117 S.Ct. 72, 136 L.Ed.2d 32 (1996), for instance, the Ninth Circuit upheld section 922(o) against a Lopez-inspired Commerce Clause challenge. The court held that the statute was a " 'regulation of the use of the channels of interstate commerce' " because "[b]y regulating the market in machineguns, including regulating intrastate machinegun possession, Congress has effectively regulated the interstate trafficking in machineguns." Id. at 952 (quoting Lopez, 514 U.S. at 559, 115 S.Ct. at 1629-30).5 Thus, section 922(o) is properly classified as a first category regulation because " 'federal regulation of intrastate incidents of transfer and possession is essential to effective control of the interstate incidents of such traffic.' " Id. (quoting United States v. Kirk, 70 F.3d 791, 797 (5th Cir.1995)), aff'd, 105 F.3d 997 (5th Cir.1997) (en banc), cert. denied, --- U.S. ----, 118 S.Ct. 47, 139 L.Ed.2d 13 (1997). In other words, it is necessary to regulate possession of machineguns in order to effectively regulate the interstate traffic in machineguns because it is impossible to sell machineguns in interstate commerce without first possessing them. Similarly, the prohibition on "taking" endangered species is properly classified as a first category regulation because one of the most effective ways to prevent traffic in endangered species is to secure the habitat of the species from predatory invasion and destruction. Therefore, like section 922(o), section 9(a)(1) of the ESA can be properly upheld as a regulation of the use of the channels of interstate commerce.6

The prohibition on takings of endangered animals also falls under Congress' authority to prevent the channels of interstate commerce from being used for immoral or injurious purposes. This authority was perhaps best described by the Supreme Court in Heart of Atlanta, 379 U.S. 241, 85 S.Ct. 348, which the Lopez Court cited and quoted in its reference to Congress' power to regulate the use of the "channels of interstate commerce." In Heart of Atlanta, the Supreme Court upheld a prohibition on racial discrimination in places of public accommodation serving interstate travelers against a Commerce Clause challenge. The Court explained that " 'the authority of Congress to keep the channels of interstate commerce free from immoral and injurious uses has been frequently sustained, and is no longer open to question.' " Id. at 256, 85 S.Ct. at 357 (citation omitted) (quoted in Lopez, 514 U.S. at 558, 115 S.Ct. at 1629). It does not matter if the activities that are regulated are of a "purely local character," the Court elaborated, " '[i]f it is interstate commerce that feels the pinch, it does not matter how local the operation which applies the squeeze.' " Id. at 258, 85 S.Ct. at 358 (citation omitted). Thus, the power of Congress over interstate commerce "also includes the power to regulate the local incidents thereof, including local activities in both the States of origin and destination, which might have a substantial and harmful effect upon that commerce." Id. This same principle was elaborated in the seminal case of United States v. Darby, 312 U.S. 100, 61 S.Ct. 451, 85 L.Ed. 609 (1941), which was the only other case cited by the Lopez Court in its description of the first category of activity that Congress can regulate under its commerce power. In Darby, the Court upheld federal wage and hour regulations against a Commerce Clause challenge, noting that such regulations were necessary to prevent states with higher regulatory standards from being disadvantaged vis-a-vis states with lower regulatory standards. In upholding the regulation, the Court explained that "Congress, following its own conception of public policy concerning the restrictions which may appropriately be imposed on interstate commerce," is free to exclude from commerce goods that will have injurious effects in the state in which they are produced or to which they are destined. Id. at 114, 61 S.Ct. at 457. This is true even though the activity prohibited by the regulation at issue in Darby--failure to meet minimum wage and maximum hour requirements--might have had little or no direct effect outside the state in which the goods were produced.

This same reasoning that the Supreme Court applied in Darby and Heart of Atlanta is applicable to the case at hand. In those cases as well as here, Congress used its authority to rid the channels of interstate commerce of injurious uses to regulate the conditions under which goods are produced for interstate commerce. In Darby, Congress used this authority to prevent labor exploitation of employees producing lumber for interstate commerce. In Heart of Atlanta, Congress used this authority to prevent racial discrimination by a hotel serving an interstate clientele. Similarly, in this case, Congress used this authority to prevent the eradication of an endangered species by a hospital that is presumably being constructed using materials and people from outside the state and which will attract employees, patients, and students from both inside and outside the state. Thus, like regulations preventing racial discrimination or labor exploitation, regulations preventing the taking of endangered species prohibit interstate actors from using the channels of interstate commerce to "promot[e] or spread[ ] evil, whether of a physical, moral or economic nature." North American Co. v. S.E.C., 327 U.S. 686, 705, 66 S.Ct. 785, 796, 90 L.Ed. 945 (1946). Congress is therefore empowered by its authority to regulate the channels of interstate commerce to prevent the taking of endangered species in cases like this where the pressures of interstate commerce place the existence of species in peril.

In his dissent, Judge Sentelle claims that this analysis of Darby and Heart of Atlanta is "far off the mark." Dissenting opinion ("Diss. op.") at 1063. It is his analysis, however, that is inconsistent with the reasoning and results in these cases. In Judge Sentelle's view, the only regulations that would qualify as a proper regulation of the channels of interstate commerce are direct regulations of persons or things that move across state lines. This view is simply not consistent with the Court's decisions in Darby and Heart of Atlanta, which I again note are the only two cases the Lopez Court cited to illustrate its first category of authorized regulation. Neither Darby nor Heart of Atlanta involved a direct regulation of persons or things that moved across state lines. The statute challenged in Darby set wage and hour requirements for lumber factory employees, while the statute in Heart of Atlanta prohibited racial discrimination against hotel customers. Judge Sentelle's argument thus proves too much: If only direct regulation of goods that travel in interstate commerce can be upheld as valid under the channels of interstate commerce prong of Lopez, both of these statutes must fail as well, a result patently inconsistent with the Court's express affirmance of them in Lopez. Therefore, contrary to Judge Sentelle's assertion, see Diss. op. at 1063-1064, the argument that access to the channels of interstate commerce may be regulated in order to prevent injurious local practices that in turn have a substantial harmful effect on interstate commerce either by discouraging such commerce or by inciting a race to the bottom is neither novel nor unduly extensive; indeed, it is the core reasoning of Darby and Heart of Atlanta.

B. Substantially Affects Interstate Commerce

The takings clause in the ESA can also be viewed as a regulation of the third category of activity that Congress may regulate under its commerce power. According to Lopez, the test of whether section 9(a)(1) of the ESA is within this category of activity "requires an analysis of whether the regulated activity 'substantially affects' interstate commerce." 514 U.S. at 559, 115 S.Ct. at 1630. A class of activities can substantially affect interstate commerce regardless of whether the activity at issue--in this case the taking of endangered species--is commercial or noncommercial. As the Lopez Court, quoting Wickard v. Filburn, 317 U.S. 111, 63 S.Ct. 82, 87 L.Ed. 122 (1942), noted:

"[E]ven if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce, and this irrespective of whether such effect is what might at some earlier time have been defined as 'direct' or 'indirect.' "

Lopez, 514 U.S. at 556, 115 S.Ct. at 1628 (quoting Wickard, 317 U.S. at 125, 63 S.Ct. at 89).7

This interpretation of the Lopez decision is consistent with this court's recent decision in Terry v. Reno, 101 F.3d 1412 (D.C.Cir.1996), cert. denied, --- U.S. ----, 117 S.Ct. 2431, 138 L.Ed.2d 193 (1997). In Terry, we upheld the Freedom of Access to Clinic Entrances Act against a Commerce Clause challenge, concluding that the Lopez decision did not restrict Congress' Commerce Clause power to activity that is "commercial." We rejected the argument that Congress could not regulate protest in front of abortion clinics because protest is an intrastate, noncommercial activity, explaining that "Congress has authority to regulate 'activities that substantially affect interstate commerce.' " Id. at 1417 (quoting Lopez, 514 U.S. at 559, 115 S.Ct. at 1629-30 (emphasis added)). We further explained that in order to be subject to Congress' Commerce Clause power, "[t]he regulated activity--in this case, interfering with abortion clinics--need not be commercial, so long as its effect on interstate commerce is substantial." Id.8

Other circuits have also held that a statute need not regulate economic activity directly in order to fall under Congress' Commerce Clause power. For instance, the Fifth Circuit upheld the Freedom of Access to Clinic Entrances Act against a challenge alleging that the Act constitutes an unconstitutional exercise of Congress' Commerce Clause power because it proscribes intrastate, noncommercial activity. United States v. Bird, 124 F.3d 667, 669-70 (5th Cir.1997). Acknowledging that the statute regulates intrastate, noncommercial protest activity, the court held that the statute was a proper exercise of Congress' Commerce Clause power because it had a substantial effect on interstate commerce. The court explained, "[a]fter Wickard--and its reaffirmance in Lopez--there can be no question that Congress is able to regulate noncommercial, intrastate activity that substantially affects interstate commerce...." Id. at 676. Similarly, the Eleventh Circuit recently upheld the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA") against a Commerce Clause challenge by the operator of a chemical manufacturing facility that was required to pay for the cleanup of entirely localized environmental contamination caused by the facility. See U.S.A. v. Olin Corp., 107 F.3d 1506, 1510 (11th Cir.1997). The court explained that a statute need not "regulate economic activity directly to satisfy the Commerce Clause" because "Lopez reiterates that a statute will pass constitutional muster if it regulates an activity, whatever its nature, 'that arise[s] out of or [is] connected with a commercial transaction, which viewed in the aggregate, substantially affects interstate commerce.' " Id. (quoting Lopez, 514 U.S. at 561, 115 S.Ct. at 1630-31).

A recent Supreme Court decision confirms our holding in Terry, 101 F.3d 1412, that activity need not be commercial in character in order to be regulated by Congress under the Commerce Clause. In Camps Newfound/Owatonna, Inc. v. Town of Harrison, Maine, --- U.S. ----, ----, 117 S.Ct. 1590, 1602, 137 L.Ed.2d 852 (1997), which involved a Commerce Clause challenge to an otherwise generally applicable state property tax exemption for charitable institutions that excluded organizations operated principally for the benefit of nonresidents, the Supreme Court held that the Commerce Clause applies to activity regardless of whether it was undertaken with the intention of earning a profit. Citing its earlier opinion in Edwards v. California, 314 U.S. 160,