Carpenters Indus. Council v. Zinke, 15-5304

• Decision Date: 11 April 2017
• Docket Number: No. 15-5304,C/w 15-5334,15-5304
• Citation: 854 F.3d 1
• Parties: CARPENTERS INDUSTRIAL COUNCIL, et al., Appellants Lewis County, a municipal corporation of the State of Washington, et al., Appellants v. Ryan ZINKE and James Kurth, Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

854 F.3d 1

CARPENTERS INDUSTRIAL COUNCIL, et al., AppellantsLewis County, a municipal corporation of the State of Washington, et al., Appellants

v.Ryan ZINKE and James Kurth, Appellees

No. 15-5304

C/w 15-5334

United States Court of Appeals, District of Columbia Circuit.

Argued September 15, 2016

Decided April 11, 2017

Mark C. Rutzick, Oak Hill, VA, argued the cause and filed the briefs for appellants Carpenters Industrial Council, et al.

Susan Elizabeth Drummond, Kirkland, WA, argued the cause for appellants Lewis County, et al. With her on the briefs was Ryan A. Smith.

Michael T. Gray, Attorney, U.S. Department of Justice, argued the cause for appellees. With him on the brief was John C. Cruden, Assistant Attorney General. Brian C. Toth, Attorney, Washington, DC, entered an appearance.

Before: Griffith, Kavanaugh, and Srinivasan, Circuit Judges.

Kavanaugh, Circuit Judge:

When the Government adopts a rule that makes it more difficult to harvest timber from certain forest lands, lumber companies that obtain timber from those forest lands may lose a source of timber supply and suffer economic harm. In recent years, that phenomenon has occurred in the Pacific Northwest. In this case, a lumber industry group has contested one such government action.

In 2012, the U.S. Fish and Wildlife Service issued a Final Rule designating 9.5 million acres of federal forest lands in California, Oregon, and Washington as critical habitat for the northern spotted owl. To put the agency's action in perspective, the designated critical habitat area is roughly twice the size of the State of New Jersey. For Easterners, imagine driving all the way up and then all the way back down the New Jersey Turnpike, and you will get a rough sense of the scope of the critical habitat designation here. The critical habitat designation means that a huge swath of forest lands in the Pacific Northwest will be substantially off-limits for timber harvesting.

Various lumber companies that obtain timber from those forest lands are members of a trade association known as the American Forest Resource Council. The Council sued the U.S. Fish and Wildlife Service to challenge the legality of the critical habitat designation.

The threshold question is whether the Council has standing to challenge the critical habitat designation on behalf of its members. The District Court ruled that the Council lacked standing. We disagree. The Council has demonstrated a substantial probability that the critical habitat designation will cause a decrease in the supply of timber from the designated forest lands, that Council members obtain their timber from those forest lands, and that Council members will suffer economic harm as a result of the decrease in the timber supply from those forest lands. Therefore, in light of our decision in Mountain States Legal Foundation v. Glickman , 92 F.3d 1228 (D.C. Cir. 1996), we conclude that the Council has standing. We reverse the judgment of the District Court and remand the case for further proceedings.

I

In 1973, Congress passed and President Nixon signed the Endangered Species Act. The Act seeks to conserve animal species that are at risk of extinction. See 16 U.S.C. § 1531 et seq . The Act authorizes the Secretary of the Interior to list species that are endangered or threatened, and to protect those species' habitats and ecosystems. See id. § 1533. An agency within the Department of the Interior—the Fish and Wildlife Service—helps implement the Act and is responsible for listing species as endangered or threatened.

When the Fish and Wildlife Service lists a species as endangered or threatened, it must also "designate any habitat" of the species "which is then considered to be critical habitat." Id. § 1533(a)(3)(A)(i). The Act defines "critical habitat" to include the "specific areas within the geographical area occupied by the species, at the time it is listed" or the "specific areas outside the geographical area occupied by the species at the time it is listed" if such areas are determined to be "essential for the conservation of the species." Id. § 1532(5)(A)(i)-(ii).

Designation of land as critical habitat triggers certain consulting requirements under Section 7 of the Act. Any federal agency seeking to authorize, fund, or carry out an action on designated land must first consult with the Service to ensure that the action is "not likely to ... result in the destruction or adverse modification" of critical habitat. Id. § 1536(a)(2).

The northern spotted owl is listed as a threatened species by the Fish and Wildlife Service. In 2012, the Service issued a Final Rule designating more than 9.5 million acres of federal forest lands in California, Oregon, and Washington as critical habitat for the northern spotted owl. See Designation of Revised Critical Habitat for the Northern Spotted Owl, 77 Fed. Reg. 71,876 (Dec. 4, 2012).

Of the lands designated as critical habitat, more than three million acres are "matrix lands." Matrix lands are lands that were previously set aside by federal statute and regulation to provide a steady supply of federal timber to the local lumber-based economy. See Oregon and California Railroad and Coos Bay Wagon Road Grant Lands Act of 1937, 43 U.S.C. § 1181a et seq. ; Record of Decision for Amendments to Forest Service and Bureau of Land Management Planning Documents Within the Range of the Northern Spotted Owl, at 7 (April 13, 1994); see also Designation of Revised Critical Habitat for the Northern Spotted Owl, 77 Fed. Reg. at 71,880 (matrix areas are lands where "timber harvest would be the goal").

The Bureau of Land Management is a federal agency within the Department of the Interior. The Bureau of Land Management is the federal agency primarily responsible for administering and selling timber from the matrix lands. As a result of the Fish and Wildlife Service's critical habitat designation, the Bureau of Land Management and other agencies responsible for managing federal forest lands must consult with the Service to ensure that any action that they take—including approving the harvest of timber for sale from matrix lands—will not result in "adverse modification" of critical habitat. In practice, because logging affects habitat, the critical habitat designation means that certain lands that were previously available as a source of timber are unlikely to still be available. Indeed, as the Fish and Wildlife Service itself acknowledged in the Final Rule, the critical habitat designation means that timber-harvesting activity on designated lands will be limited, and that "traditional clearcutting" of timber will be disfavored. Designation of Revised Critical Habitat for the Northern Spotted Owl, 77 Fed. Reg. at 71,941.

A forest products manufacturing trade association known as the American Forest Resource Council represents lumber companies that obtain timber from those designated forest lands. On behalf of its member lumber companies, the Council sued in the U.S. District Court to challenge the legality of the critical habitat designation. The Council claimed, among other things, that the Service did not make use of the "best scientific data available" when finalizing the critical habitat designation, as required by the Endangered Species Act. 16 U.S.C. § 1533(b)(2).

To demonstrate its standing to challenge the critical habitat designation, the Council submitted a declaration from its president, Thomas Partin. In the declaration, Partin asserted that many of the Council's lumber companies depend on federal timber sold from the designated lands. Partin alleged that the critical habitat designation will decrease the supply of federal timber from the designated lands, which in turn will cause his member companies to suffer economic harm.

Notably, the Fish and Wildlife Service did not challenge the standing of the Council (or any of the other parties) when the case was filed in the District Court. Both sides later submitted summary judgment briefs, and, again, the Service did not question the Council's standing. The Service's failure to raise a standing argument no doubt was a considered decision. The Service presumably thought it obvious at the time that the Council had standing.

While the summary judgment motions were pending, however, this Court decided Swanson Group Manufacturing LLC v. Jewell , 790 F.3d 235 (D.C. Cir. 2015). Swanson involved a challenge by a group of lumber industry plaintiffs to the Bureau of Land Management's failure to sell statutorily required amounts of timber. The Court in Swanson held that the plaintiffs' declarations did not establish standing because they were conclusory and failed to show that the challenged agency action would cause economic injury to the plaintiffs. Id. at 242-44.

Shortly after Swanson was decided, the District Court understandably wanted to determine whether that case affected the standing analysis in this case. The Court issued an order to the Council and the other plaintiffs to "show cause in writing" why their case "should not also be dismissed for lack of standing" based on Swanson . Show Cause Order at 1, Carpenters Industrial Council v. Jewell , 139 F.Supp.3d 7 (D.D.C. 2015) (No. 13-cv-00361) (J.A. 106). In response, the Council cited Mountain States Legal Foundation v. Glickman , 92 F.3d 1228 (D.C. Cir. 1996), and Swanson , and argued that it had standing based on the asserted economic injuries of its member companies. The Service filed a response to the show cause order in which it argued, for the first time, that the case should be dismissed for lack of standing.

The District Court ruled that the Council lacked standing. The District Court reasoned that the Council's allegations of economic harm were "indistinguishable from the conclusory allegations of economic harm" that the Swanson Court held were insufficient to support standing. Carpenters Industrial Council , 139 F.Supp.3d at 12. The District Court granted summary judgment for the Service. The Council appealed. We revi...