Markle Interests, L.L.C. v. U.S. Fish & Wildlife Serv.

• Decision Date: 13 February 2017
• Docket Number: No. 14-31008,Cons. w/ 14-31021,14-31008
• Parties: MARKLE INTERESTS, L.L.C.; P&F Lumber Company 2000, L.L.C.; PF Monroe Properties, L.L.C., Plaintiffs–Appellants, v. UNITED STATES FISH AND WILDLIFE SERVICE; Daniel M. Ashe, Director of United States Fish & Wildlife Service, in his official capacity; United States Department of Interior; Sally Jewell, in her official capacity as Secretary of the Department of Interior, Defendants–Appellees, Center for Biological Diversity; Gulf Restoration Network, Intervenor Defendants–Appellees. Weyerhaeuser Company, Plaintiff–Appellant, v. United States Fish and Wildlife Service; Daniel M. Ashe, Director of United States Fish & Wildlife Service, in his official capacity; Sally Jewell, in her official capacity as Secretary of the Department of Interior, Defendants–Appellees, Center for Biological Diversity; Gulf Restoration Network, Intervenor Defendants–Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

848 F.3d 635 (Mem)

MARKLE INTERESTS, L.L.C.; P&F Lumber Company 2000, L.L.C.; PF Monroe Properties, L.L.C., Plaintiffs–Appellants,

v.UNITED STATES FISH AND WILDLIFE SERVICE; Daniel M. Ashe, Director of United States Fish & Wildlife Service, in his official capacity; United States Department of Interior; Sally Jewell, in her official capacity as Secretary of the Department of Interior, Defendants–Appellees,Center for Biological Diversity; Gulf Restoration Network, Intervenor Defendants–Appellees.

Weyerhaeuser Company, Plaintiff–Appellant,

v.United States Fish and Wildlife Service; Daniel M. Ashe, Director of United States Fish & Wildlife Service, in his official capacity; Sally Jewell, in her official capacity as Secretary of the Department of Interior, Defendants–Appellees,Center for Biological Diversity; Gulf Restoration Network, Intervenor Defendants–Appellees.

No. 14-31008

Cons. w/ 14-31021

United States Court of Appeals, Fifth Circuit.

February 13, 2017

Malcolm Reed Hopper, Esq., Pacific Legal Foundation, Sacramento, CA, for Plaintiff–Appellant Markle Interests, L.L.C.

Edward B. Poitevent, II, Metairie, LA, Brian Michael Ballay, Esq., Baker, Donelson, Bearman, Caldwell & Berkowitz, P.C., New Orleans, LA, Plaintiffs–Appellants P&F Lumber Company 2000, L.L.C. and PF Monroe Properties, L.L.C.

David C. Shilton, Esq., U.S. Department of Justice, Environment & Natural Resources Division, Mary Elisabeth Hollingsworth, U.S. Department of Justice, Washington, DC, Luther Langon Hajek, U.S. Department of Justice, Environmental Defense Section, Denver, CO, for Defendants–Appellees.

Collette Lucille Adkins, Center for Biological Diversity, Circle Pines, MN, John Buse, Center for Biological Diversity, Oakland, CA, Elizabeth Grace Livingston de Calderon, Tulane University, New Orleans, LA, for Intervenor Defendants–Appellees.

Paul Korman, Tyson Kade, Van Ness Feldman, L.L.P., Washington, DC, for American Farm Bureau Federation, National Alliance of Forest Owners, and National Association of Home Builders, Amici Curiae.

Andrew Lynn Brasher, Deputy Solicitor, Office of the Attorney General, Montgomery, AL, for State of Alabama, State of Alaska, State of Arkansas, State of Georgia, State of Idaho, State of Kansas, State of Louisiana, State of Montana, State of Nevada, State of North Dakota, State of Ohio, State of Oklahoma, State of South Carolina, State of Texas, and State of Wyoming, Amici Curiae.

Before REAVLEY, OWEN, and HIGGINSON, Circuit Judges.

STEPHEN A. HIGGINSON, Circuit Judge:

The court having been polled at the request of one of its members, and a majority of the judges who are in regular active service and not disqualified not having voted in favor (Fed. R. App. P. 35 and 5th Cir. R. 35 ), the Petition for Rehearing En Banc is DENIED. In the en banc poll, six judges voted in favor of rehearing (Judges Jolly, Jones, Smith, Clement, Owen, and Elrod) and eight judges voted against rehearing (Chief Judge Stewart and Judges Dennis, Prado, Southwick, Haynes, Graves, Higginson, and Costa). Judge Jones, joined by Judges Jolly, Smith, Clement, Owen, and Elrod, dissents from the court's denial of rehearing en banc, and her dissent is attached.

JONES, Circuit Judge, joined by JOLLY, SMITH, CLEMENT, OWEN, and ELROD, Circuit Judges, dissenting from Denial of Rehearing En Banc:

The protagonist in this Endangered Species Act (ESA) case—the dusky gopher frog—is rumored to "play dead," "cover its eyes," "peak [sic] at you[,] and then pretend to be dead again." Markle Interests, L.L.C. v. U.S. Fish & Wildlife Serv. , 827 F.3d 452, 458 n.2 (5th Cir. 2016). The panel majority regrettably followed the same strategy in judicial review—play dead, cover their eyes, peek, and play dead again. Even more regrettably, the court refused to rehear this decision en banc. I respectfully dissent.

The panel opinion, over Judge Owen's cogent dissent, id. at 480–94, approved an unauthorized extension of ESA restrictions to a 1,500 acre-plus Louisiana land tract that is neither occupied by nor suitable for occupation by nor connected in any way to the "shy frog." The frogs currently live upon or can inhabit eleven other uncontested critical habitat tracts in Mississippi. No conservation benefits accrue to them, but this designation costs the Louisiana landowners $34 million in future development opportunities. Properly construed, the ESA does not authorize this wholly unprecedented regulatory action.

The panel majority upheld the designation of the tract as "unoccupied critical habitat." See 16 U.S.C. § 1532(5)(A)(ii). Relying on administrative deference, the majority reasoned that (1) the ESA and its implementing regulations have no "habitability requirement"; (2) the (unoccupied) Louisiana land is "essential for the conservation of" the frog even though it contains just one of three features critical to dusky gopher frog habitat; and (3) the Fish and Wildlife Service's decision not to exclude this tract from critical-habitat designation is discretionary and thus not judicially reviewable. I respectfully submit that all of these conclusions are wrong.

Each issue turns essentially on statutory construction, not on deference to administrative discretion or scientific factfinding. The panel majority opinion obscures the necessity for careful statutory exposition. More troublingly, the majority opinion fails to distinguish relevant precedent that recognized Congress's prescribed limit to designations of unoccupied critical habitat. Further, in declaring the decision not to exclude this tract as beyond judicial review, the panel did not notice Bennett v. Spear, 520 U.S. 154, 117 S.Ct. 1154, 137 L.Ed.2d 281 (1997), which upholds judicial review for this exact statute, and the panel majority ignored recent Supreme Court precedents that have reined in attempts to prevent judicial review of agency action.

Despite the majority's disclaimers and attempt to cabin their rationale, the ramifications of this decision for national land use regulation and for judicial review of agency action cannot be underestimated. Fifteen states appear as amici urging rehearing en banc. For reasons explained herewith and by Judge Owen's dissent, I would have granted rehearing en banc.

I. Background

The U.S. Fish and Wildlife Service (the Service) is one of two agencies tasked with implementing the ESA. The ESA requires the identification and listing of endangered and threatened species. When a particular species is listed, the Service must designate the species' "critical habitat." In particular, the Service

to the maximum extent prudent and determinable ... shall ... designate any habitat of such species which is then considered to be critical habitat ... and ... may, from time-to-time thereafter as appropriate, revise such designation.

16 U.S.C. § 1533(a)(3)(A)(i)–(ii).

"Critical habitat" is defined in an earlier provision as:

(i) the specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the provisions of section 1533 of this title, 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; ["occupied critical habitat"] and

(ii) specific areas outside the geographical area occupied by the species at the time it is listed in accordance with the provisions of section 1533 of this title, upon a determination by the Secretary that such areas are essential for the conservation of the species. ["unoccupied critical habitat"]

Id. § 1532(5)(A)(i)–(ii).

Finally, the Service shall designate critical habitat "after taking into consideration the economic impact, the impact on national security, and any other relevant impact, of specifying any particular area as critical habitat," but it may exclude any area from such designation if "the benefits of such exclusion outweigh the benefits of specifying such area" as critical habitat. Id. § 1533(b)(2).

Critical-habitat designation is consequential. "Designation of private property as critical habitat can impose significant costs on landowners because federal agencies may not authorize, fund, or carry out actions that are likely to 'result in the destruction or adverse modification' of critical habitat." Otay Mesa Prop., L.P. v. U.S. Dep't of Interior , 646 F.3d 914, 915 (D.C. Cir. 2011) (quoting 16 U.S.C. § 1536(a)(2) ).

The Service listed the dusky gopher frog as endangered in 2001. Final Rule to List the Mississippi Gopher Frog Distinct Population Segment of Dusky Gopher Frog As Endangered, 66 Fed. Reg. 62,993 (Dec. 4, 2001). Goaded by a lawsuit, and after notice and comment, the Service published a final rule designating critical habitat in 2012. Designation of Critical Habitat for Dusky Gopher Frog, 77 Fed. Reg. 35,118 (June 12, 2012) [hereinafter Final Designation]. The critical-habitat designation included units spanning several thousand acres in Mississippi, and, as relevant here, Unit 1—consisting of 1,544 acres in Louisiana, which are not occupied by the dusky gopher frog. Id. The Service was thus required to show that Unit 1—the "specific area"—is "essential for the conservation of the [dusky gopher frog]." 16 U.S.C. § 1532(5)(A)(ii).

Unlike all of the Mississippi units, Unit 1 is uninhabitable by the shy frog. Final Designation, 77 Fed. Reg. at 35,131. Unit 1, in fact, contains only one of the three "physical and biological features" deemed necessary to dusky gopher frog habitat—five ephemeral ponds that could support the frog's reproduction. Id. at 35,123, 35,132. Worse still, "[a]pproximately ninety percent of [Unit 1] is currently covered with closed canopy loblolly pine plantations," and the two remaining features essential for the frog's conservation require an open -canopied longleaf pine ecosystem. Markle Interests, L.L.C. v. U.S. Fish & Wildlife Serv. , 827 F.3d 452, 482 (5th Cir. 2016) (Owen, J., dissenting); Final Designation, 77 Fed. Reg. at 35,131. In the Service's...