New Mexico Cattle Growers Assoc. v. US Fish & Wildlife Serv.

• Decision Date: 11 May 2001
• Docket Number: No. 00-2050,ARIZONA-NEW,00-2050
• Parties: (10th Cir. 2001) NEW MEXICO CATTLE GROWERS ASSOCIATION; NEW MEXICO CATTLE GROWERS ASSOCIATION, a nonprofit organization; NEW MEXICO PUBLIC LANDS COUNCIL, a nonprofit corporation; NEW MEXICO WOOL GROWERS, INC., a nonprofit corporation; NEW MEXICO FARM AND LIVESTOCK BUREAU, a nonprofit corporation; NEW MEXICO WHEAT GROWERS ASSOCIATION, a non profit corporation; COALITION OFMEXICO COUNTIES FOR STABLE ECONOMIC GROWTH, a nonprofit organization; HIDALGO COUNTY CATTLE GROWERS ASSOCIATION, a nonprofit organization, on behalf of themselves and their members; PRODUCTION CREDIT ASSOCIATION OF NEW MEXICO, Plaintiffs - Appellants, v. UNITED STATES FISH AND WILDLIFE SERVICE, an Agency of the United States Department of Interior; GALE A. NORTON, <A HREF="#fr1-*" name="fn1-*">* Secretary of the United States Department of the Interior; JOHN ROGERS, United States Fish and Wildlife Service Director and Fish and Wildlife Service Regional Director; NANCY KAUFMAN, Southwest Regional Director, United States Fish and Wildlife Service, Defendants - Appellees
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1277

248 F.3d 1277 (10th Cir. 2001)

NEW MEXICO CATTLE GROWERS ASSOCIATION; NEW MEXICO CATTLE GROWERS ASSOCIATION, a nonprofit organization; NEW MEXICO PUBLIC LANDS COUNCIL, a nonprofit corporation; NEW MEXICO WOOL GROWERS, INC., a nonprofit corporation; NEW MEXICO FARM AND LIVESTOCK BUREAU, a nonprofit corporation; NEW MEXICO WHEAT GROWERS ASSOCIATION, a non profit corporation; COALITION OF ARIZONA-NEW MEXICO COUNTIES FOR STABLE ECONOMIC GROWTH, a nonprofit organization; HIDALGO COUNTY CATTLE GROWERS ASSOCIATION, a nonprofit organization, on behalf of themselves and their members; PRODUCTION CREDIT ASSOCIATION OF NEW MEXICO, Plaintiffs - Appellants, v. UNITED STATES FISH AND WILDLIFE SERVICE, an Agency of the United States Department of Interior; GALE A. NORTON,^* Secretary of the United States Department of the Interior; JOHN ROGERS, United States Fish and Wildlife Service Director and Fish and Wildlife Service Regional Director; NANCY KAUFMAN, Southwest Regional Director, United States Fish and Wildlife Service, Defendants - Appellees.

No. 00-2050

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

May 11, 2001

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW MEXICO

(D. Ct. No. CIV-98-275-LH)

[Copyrighted Material Omitted] Marc R. Stimpert (Karen Budd-Falen and John M. McCall, with him on the briefs), Budd-Falen Law Offices, P.C., Cheyenne, Wyoming, appearing for Appellants.

Katherine J. Barton, United States Department of Justice, Environment & Natural Resources Division, Appellate Section, Washington, DC (Lois J. Schiffer, Assistant Attorney General, John A. Bryson, and Jean E. Williams, United States Department of Justice, Environment & Natural Resources Division, Appellate Section, Washington, DC; John W. Zavitz, Assistant United States Attorney, Albuquerque, New Mexico; Benjamin Jesup, United States Department of the Interior, Office of the Solicitor, Washington, DC, and Janet Spaulding, United States Department of the Interior, Office of the Solicitor, Albuquerque, New Mexico, with her on the brief), appearing for Appellees.

Before TACHA, Chief Judge, KELLY, Circuit Judge, and LUNGSTRUM,^** District Judge.

TACHA, Chief Circuit Judge.

The New Mexico Cattle Growers Association, New Mexico Farm & Livestock Bureau, New Mexico Wool Growers, Inc., New Mexico Wheat Growers Association, New Mexico Public Lands Council, Albuquerque Production Credit Association, Coalition of Arizona/New Mexico Counties for Stable Economic Growth, and Hidalgo County Cattle Growers Association (collectively "Appellants") all represent, in some fashion, elements of New Mexico's agricultural industry. Appellants appeal an order of the district court dismissing their suit against Appellee U.S. Fish & Wildlife Service ("FWS"). We exercise jurisdiction pursuant to the Administration Procedures Act ("APA"), 28 U.S.C. 701-06, and reverse.

I.

The Southwestern Willow Flycatcher ("flycatcher"), empidonax traillii extimus, is one of four sub-species of the willow flycatcher, a small bird that nests in riparian areas along river beds. On July 23, 1993, the FWS published its "Proposed Rule to List the Southwestern Willow Flycatcher as Endangered With Critical Habitat." 58 Fed. Reg. 39495. On February 27, 1995, the FWS issued its "Final Rule Determining Endangered Status for the Southwestern Willow Flycatcher." 60 Fed. Reg. 10694. The Final Rule listed the flycatcher as endangered, but deferred the critical habitat designation ("CHD") in order to gather more information. However, the FWS did not, on its own initiative, move forward with the CHD for the flycatcher.

On March 20, 1997, the U.S. District Court for the District of Arizona, in the case Southwest Ctr. for Biological Diversity v. Babbitt, Civ. No. 96-1874-PHX-RGS (D. Ariz. March 20, 1997), ordered the FWS to complete the CHD for the flycatcher within 120 days. Pursuant to the court order, the FWS issued its CHD for the flycatcher on July 22, 1997. At that time, the known population of the flycatcher was between 300 and 500 nesting pairs spread across seven states and parts of Mexico. The CHD designated eighteen critical habitat units, including four in New Mexico, totaling 599 miles of stream and river beds.

The Endangered Species Act ("ESA"), which controls CHDs, requires the FWS to perform an economic analysis of the effects of the CHD before making a final designation. 16 U.S.C. 1533(b)(2). In order to determine what the "economic impact" of a CHD will be, the FWS has adopted an incremental baseline approach (the "baseline approach"). The baseline approach utilized by the FWS is premised on the idea that the listing of the species (which will occur prior to or simultaneously with the CHD) will have economic impacts that are not to be considered. The primary statutory rationale for this position comes from 16 U.S.C. 1533(b)(1)(A), which states that listing determinations be made "solely on the basis of the best scientific and commercial data available." Thus, the baseline approach moves any economic impact that can be attributed to listing below the baseline and, when making the CHD, takes into account only those economic impacts rising above the baseline. Using the baseline approach, the FWS determined that the flycatcher CHD resulted in no economic impact, stating that "[c]ritical habitat designation will . . . result in no additional protection for the flycatcher nor have any additional economic effects beyond those that may have been caused by listing and by other statutes." Division of Economics, U.S. Fish and Wildlife Service, Economic Analysis of Critical Habitat Designation for the Southwestern Flycatcher, S3 (1997).

The appellants filed suit in district court in March 1998, challenging the flycatcher designation and alleging that the FWS had violated various provisions of both the ESA and the National Environmental Protection Act ("NEPA"). In August 1998, the FWS filed its administrative record ("AR") with the district court. The appellants objected that the AR was incomplete. The FWS responded that the AR was complete and refused to supplement it. The appellants proceeded to file their opening brief, and the FWS filed its response. Included with the FWS's response brief was an eleven-page declaration ("declaration") by Jamie Rappaport Clark, the Secretary of the FWS. Accompanying the declaration were approximately 77 pages of attachments.

The appellants objected to the introduction by the FWS of an extra-record document and characterized the declaration and its attachments as a post-hoc rationalization of the FWS's actions. The FWS characterized the declaration as providing background information and an explanation of the AR. On December 21, 1999, the district court ruled the declaration and its attachments to be admissible and proceeded to rule on the merits in favor of the FWS on all counts. This appeal followed.

Specifically, the appellants make the following arguments on appeal: (1) that the FWS's adoption of the baseline approach to measuring the economic impact of the flycatcher CHD is an erroneous construction and, thus, a violation of the ESA; (2) that the district court erred in ruling the declaration and its attachments admissible; (3) that the FWS misapplied the critical habitat definition set forth in the ESA; (4) that the FWS violated NEPA by applying the baseline approach to the environmental impact analysis undertaken in the EA; (5) that the FWS failed to address adequate alternatives to the CHD pursuant to NEPA¹; and (6) that the FWS, in making the flycatcher CHD, failed to properly cooperate with state and local agencies as required by NEPA. Because we rule in favor of the appellants on the first issue raised by holding that the baseline approach to economic impact analysis is not permitted by the ESA, thus setting aside the flycatcher CHD, we need not address any of the other issues raised.

II.

This case is before us on review pursuant to the APA. Our standard of review of the lower court's decision in an APA case is de novo. Sac & Fox Nation v. Norton, 240 F.3d 1250, 1260 (10th Cir. 2001). "[W]e owe no deference to the district court's decision." Id. When reviewing agency action, our scope of review is set forth in the APA. "[W]e cannot set aside an agency decision unless it fails to meet statutory, procedural or constitutional requirements, or unless it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id.; see 5 U.S.C. 706(2)(A)-(D); see also, Publ. Lands Council v. Babbitt, 167 F.3d 1287, 1293 (10th Cir. 1999).

Normally, when the agency decision at issue involves interpretations of federal statutes, we owe deference to that decision as set forth in Chevron, U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837, 842-43 (1984). Indeed, the district court in this case, applying Chevron deference to the FWS's use of the baseline approach, did not find it to be a violation of the ESA. The appellants, however, argue that Chevron deference is not applicable in this case. We agree.

The FWS concedes, in fact, that Chevron deference is not due the FWS's use of the baseline approach in making CHDs. Because the statutory interpretation resulting in the baseline approach has never undergone the formal rulemaking process, it remains an informal interpretation not entitled to deference. Hunnicutt v. Hawk, 229 F.3d 997, 1000 (10th Cir. 2000) ("'Where the agency's interpretation of the statute is made informally, however, such as by a 'program statement,' the interpretation is not entitled to . . . deference.'" (quoting Fristoe v. Thompson, 144 F.3d 627, 631 (10th Cir. 1998))). Instead, we simply ask if the agency's interpretation is "well reasoned" and has the "power to persuade." Fristoe, 144 F.3d at 631 (quoting S. Ute Indian Tribe v. Amoco Prod. Co., 119 F.3d 816, 834 (10th Cir. 1997), overruled on other grounds by Amoco Prod. Co. v. S. Ute Indian Tribe, 526 U.S. 865...