Ariz. Cattle Growers' Ass'n v. Salazar, 08-15810.

Decision Date04 June 2010
Docket NumberNo. 08-15810.,08-15810.
Citation606 F.3d 1160
PartiesARIZONA CATTLE GROWERS' ASSOCIATION, Plaintiff-Appellant,v.Ken SALAZAR, in his official capacity as Secretary of the Interior; H. Dale Hall, in his official capacity as Director of Fish & Wildlife Service; United States Department of the Interior; Paul K. Charlton; Eric H. Holder Jr., Attorney General, Defendants-Appellees,Center for Biological Diversity, Defendant-intervenor-Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Norman D. James, Fennemore Craig, Phoenix, AZ, for the plaintiff-appellant, Arizona Cattle Growers' Association.

Andrew C. Mergen, Rebecca Riley, & Robert H. Oakley, U.S. Department of Justice, Environment and Natural Resources Division, Washington, D.C., for the defendant-appellee, U.S. Fish and Wildlife Service.

Karen Budd-Falen, Budd-Falen Law Offices, LLC, Cheyenne, WY, for amicus curiae, New Mexico Cattle Growers' Association.

Marc D. Fink, Center for Biological Diversity, Duluth, MN, and Matt Kenna, Western Environmental Law Center, Durango, CO, for defendant-intervenor-appellee, Center for Biological Diversity.

Appeal from the United States District Court for the District of Arizona, Susan R. Bolton, District Judge, Presiding. D.C. No. 2:06-CV-01744-SRB.

Before B. FLETCHER, WILLIAM C. CANBY, JR., and SUSAN P. GRABER, Circuit Judges.

OPINION

BETTY B. FLETCHER, Circuit Judge:

Arizona Cattle Growers' Association (Arizona Cattle) appeals from the district court's grant of summary judgment rejecting its challenge to the United States Fish and Wildlife Service's (“FWS”) designation of critical habitat for the Mexican Spotted Owl. Arizona Cattle argues that the FWS unlawfully designated areas containing no owls as “occupied” habitat and that the FWS calculated the economic impacts of the designation by applying an impermissible “baseline” approach. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

I. BACKGROUNDA. Litigation History

In 1993 the Mexican Spotted Owl was listed as a threatened species under the Endangered Species Act (“ESA”). The listing decision prompted a series of lawsuits alternately seeking to compel the FWS to designate critical habitat for the owl and, following the FWS's designation of habitat, attacking that designation.

The first such lawsuit was in 1995 to compel the FWS to designate critical habitat and resulted in the FWS's issuing a final rule designating 4.6 million acres of critical owl habitat, a designation that was quickly challenged in court and then revoked in 1998. After another lawsuit was filed to compel the FWS to designate habitat, the FWS proposed a rule in 2000 to designate 13.5 million acres of critical habitat and in 2001 the agency promulgated a final rule that again designated 4.6 million acres. That rule was later struck down and, rather than propose a new rule, the FWS reopened the comment period on the rule it proposed in 2000. In 2004 the FWS designated approximately 8.6 million acres of critical habitat. It is this designation, the 2004 Final Rule, that Arizona Cattle challenges in the current action.

Arizona Cattle moved for summary judgment to set aside the 2004 Final Rule as invalid on several grounds, only two of which are appealed. First, Arizona Cattle argues that the FWS impermissibly treated areas in which no owls are found as “occupied” under the ESA and, in doing so, bypassed the statutory requirements for designating unoccupied areas. Second, Arizona Cattle challenges the FWS's determination of the economic impacts of the designation, arguing primarily that the FWS applied an impermissible “baseline” approach that did not account for economic impacts of the critical habitat designation that are also attributable to the listing decision. The district court rejected Arizona Cattle's arguments and granted the Appellees' cross-motions for summary judgment.

B. The 2004 Final Rule

The FWS relied on three types of habitat management areas, first outlined in a Recovery Plan created in 1995, as a starting point for the 2004 Final Rule: protected areas, restricted areas, and other forest and woodland types. Protected areas are those areas containing known owl sites, termed Protected Activity Centers (“PACs”); “steep slope” areas meeting certain forest conditions; and legally and administratively reserved lands. “PACs include a minimum of 600 acres ... that includes the best nesting and roosting ( i.e., resting) habitat in the area .... and the most proximal and highly used foraging areas.” However, PACs contain only 75% of necessary foraging areas for the owl. Restricted areas include non-steep slope areas with appropriate forest conditions that are “adjacent to or outside of protected areas.” “Areas outside of PACs, including restricted areas, provide additional habitat appropriate for foraging.” According to the 2004 Final Rule, restricted areas “also provide habitat for nonterritorial birds[,] ... support dispersing juveniles, and ... provide replacement nest/roost habitat on the landscape through time.”

The FWS used these categories to “develop[ ] alternatives for critical habitat designation,” selecting protected and restricted areas as a starting point for potential owl critical habitat.1 In the 2004 Final Rule the FWS adopted an alternative that excluded all tribal lands from designation, refined critical habitat unit boundaries, and excluded certain areas that did not contain PACs. The FWS also excluded “Wildland-Urban Interface” areas identified as being at high risk of catastrophic wildfire. The 2004 Final Rule concluded that all of the designated habitat was occupied by the owl.

II. STANDARD OF REVIEW

We review the grant of summary judgment de novo, reviewing directly the agency's action under the Administrative Procedure Act's arbitrary and capricious standard. Gifford Pinchot Task Force v. U.S. Fish & Wildlife Serv., 378 F.3d 1059, 1065 (9th Cir.2004).

[A]n agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Motor Vehicle Mfrs. Ass'n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). In recognition of the agency's technical expertise the court usually defers to the agency's analysis, particularly within its area of competence. See

Earth Island Inst. v. Hogarth, 494 F.3d 757, 766 (9th Cir.2007); Nat'l Ass'n of Home Builders v. Norton, 340 F.3d 835, 843-44 (9th Cir.2003). However, the court need not defer to the agency when the agency's decision is without substantial basis in fact, and there must be a rational connection between the facts found and the determinations made. Earth Island, 494 F.3d at 766.

III. THE FWS PROPERLY DESIGNATED ONLY OCCUPIED AREAS AS CRITICAL HABITAT

We first consider whether the owl “occupied” the designated areas, as defined by the ESA. We conclude that the FWS permissibly interpreted the word “occupied” in the ESA to include areas where the owl was likely to be present and that, applying this definition, the FWS designated only “occupied” areas.

A. The ESA and the Definition of “Occupied”

The ESA defines a species' critical habitat as

(i) the specific areas within the geographical area occupied by the species, at the time it is listed ..., on which are found those physical or biological features (I) essential to the conservation of the species and (II) which may require special management considerations or protection; and
(ii) specific areas outside the geographical area occupied by the species at the time it is listed ..., upon a determination by the Secretary that such areas are essential for the conservation of the species.

16 U.S.C. § 1532(5)(A). The statute thus differentiates between “occupied” and “unoccupied” areas, imposing a more onerous procedure on the designation of unoccupied areas by requiring the Secretary to make a showing that unoccupied areas are essential for the conservation of the species. Although this appeal turns primarily on the factual question of whether the FWS treated unoccupied areas as occupied to avoid this more onerous process, we face the preliminary issue of what it means for an area to be “occupied” under the ESA.

It is useful to unpack this inquiry into two components: uncertainty and frequency. Uncertainty is a factor when the FWS has reason to believe that owls are present in a given area, but lacks conclusive proof of their presence. Frequency is a factor when owls are shown to have only an intermittent presence in a given area. Occasionally, both factors will play a part in determining whether an area is “occupied.” Because the ESA permits only one of two possible outcomes for this inquiry-occupied or unoccupied-when the result is best characterized by a spectrum, we must determine the scope of the FWS's authority to categorize as “occupied” those areas that may not fit neatly into either pigeonhole.

We have ample guidance on the “uncertainty” issue. The ESA provides that the agency must determine critical habitat using the “best scientific data available.” 16 U.S.C. § 1533(b)(2); see also id. § 1533(b)(6)(C)(ii). This standard does not require that the FWS act only when it can justify its decision with absolute confidence. See, e.g., Pub. Citizen Health Research Group v. U.S. DOL, 557 F.3d 165, 176 (3d Cir.2009); Greenpeace Action v. Franklin, 982 F.2d 1342, 1354-55 (9th Cir.1992). Although the FWS cannot act on pure speculation or contrary to the evidence, the ESA accepts agency decisions in the face of uncertainty. Compare Ariz. Cattle Growers' Ass'n v. U.S. Fish & Wildlife, 273 F.3d 1229, 1244 (9th Cir.2001) with Sw. Ctr. for Biological Diversity v. Babbitt, ...

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