Otay Mesa Prop., L.P. v. U.S. Dep't of the Interior

Decision Date25 September 2018
Docket NumberNo. 13-cv-0240 (KBJ),13-cv-0240 (KBJ)
Citation344 F.Supp.3d 355
Parties OTAY MESA PROPERTY, L.P., et al., Plaintiffs, v. UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Defendants.
CourtU.S. District Court — District of Columbia

Roger Joseph Marzulla, Nancie G. Marzulla, Marzulla Law, LLC, Washington, DC, for Plaintiffs.

Kristen Byrnes Floom, U.S. Department of Justice, Washington, DC, for Defendants.


KETANJI BROWN JACKSON, United States District Judge

Plaintiffs Otay Mesa Property, L.P., Rancho Vista Del Mar, and Otay International, LLC (collectively "Otay Mesa" or "Plaintiffs") own land in San Diego County, California, that the U.S. Fish and Wildlife Service ("the FWS") has designated as a "critical habit" for the endangered Riverside fairy shrimp under the Endangered Species Act ("the ESA"), 16 U.S.C §§ 1531 – 1544. Otay Mesa has filed the instant action against the FWS and its acting Director, the U.S. Department of the Interior ("Interior"), and two high-ranking Interior officers in their official capacities (collectively, "Defendants") to challenge the propriety of the FWS's critical habitat designation under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 – 706.1 This Court has already issued one memorandum opinion in this matter, see Otay Mesa Prop., L.P. v. U.S. Dep't of the Interior , 144 F.Supp.3d 35 (D.D.C. 2015), wherein all disputed issues between Otay Mesa and FWS concerning the critical habitat designation for the endangered Riverside fairy shrimp were resolved save one: namely, whether it was proper for the FWS to assign a ‘critical habitat’ designation to 56 acres of Otay Mesa's property that is immediately adjacent to the stock pond that contains the shrimp solely on the basis of the agency's finding that the types of geological features that are generally necessary to support the shrimp species exist on those acres. The FWS had concluded that the 56 acres constituted either "occupied" critical habitat under the first prong of section 1532(5)(A) of Title 16 of the United States Code, or, alternatively, "unoccupied" critical habitat essential for the conservation of the species under the second prong of that same provision, but the agency had not conducted any hydrological studies or other surveys to determine the extent to which the 56 acres of land actually supported the ecological system that is necessary for the shrimp's survival. As explained below, the question of whether or not the FWS employed an appropriate methodology to reach the critical habitat determination at issue in this case depends upon the meaning of the term "occupied" as it appears in the ESA, and also turns on the distinction that that statute makes between the standards for designating occupied and unoccupied critical habitats.

Before this Court at present are the parties' renewed cross-motions for summary judgment and the supplemental briefs that they have filed regarding these key legal issues. Otay Mesa maintains that it is entitled to judgment as a matter of law, because the FWS improperly designated the 56 acres of land as "occupied" habitat even though the shrimp live only in the one-acre stock pond and not on the land. (See Pls.' 2d Suppl. Br., ECF No. 42, at 8–9.)2 Otay Mesa further contends that the FWS's occupied critical habitat designation is improper under the ESA because there is no record evidence demonstrating that all 56 acres of adjacent land must be preserved in order to supply water to the one-acre stock pond where the shrimp live, and that the FWS improperly designated the 56 acres as "unoccupied" critical habitat in the alternative because it failed to apply the statutory standard for unoccupied critical habitat designations. (See id. at 11–13; Pls.' Resp. to Defs.' Suppl. Br. & Pls.' Renewed Mot. for Summ. J., ECF No. 36, at 3–4.) Defendants respond that the Court should order summary judgment in their favor, because the FWS reasonably determined that the stock pond and all 56 adjacent acres satisfy the ESA's definition of occupied critical habitat on the basis of the best available scientific data (Defs.' 2d Suppl. Br., ECF No. 41, at 7–12, 16–22), and the FWS applied the correct legal standards when alternatively designating this area as unoccupied critical habitat under the ESA (id. at 12–16).

For the reasons explained fully below, this Court finds that the law and record evidence do not support the FWS's "occupied" or "unoccupied" critical habitat designations, and thus the critical habitat determination that Otay Mesa challenges here must be set aside as arbitrary and capricious and contrary to law in violation of the APA. To be specific, the manner in which the FWS determined the scope of the area that the Riverside fairy shrimp occupies is inconsistent with the ESA's prescriptions for making that determination, and when the agency determined the area of unoccupied critical habitat, it failed to employ the statutory standard that is applicable to unoccupied critical habitat designations. Consequently, Otay Mesa's renewed motion for summary judgment must be GRANTED , Defendants' motion for summary judgment must be DENIED , and the designation of Otay Mesa's property as critical habitat must be VACATED . A separate Order that remands this matter to the agency for further proceedings will follow.

A. Prior Proceedings

The procedural history of this dispute is described in detail in the opinion that the Court previously issued in this case, see Otay Mesa Prop. , 144 F.Supp.3d 35 ; therefore, only a brief recounting of certain relevant background details is necessary here. The long and short of it is that Riverside fairy shrimp are "small fresh-water crustacean[s]" that "rely upon ‘vernal pool’ hydrology" to grow and reproduce, id. at 44, and since 2001, the FWS has been engaged in rule-making aimed at designating the critical habitat for this endangered species pursuant to the prescriptions of the ESA, see id. at 47.3 Two prior rules that the FWS promulgated with respect to these shrimp—one in 2001 and one in 2005—were each challenged in federal court, which resulted in settlement agreements and the subsequent promulgation of revised rules. Id. At issue in this case is the most recent critical habitat designation for this species, which the FWS promulgated by a third rule-making process that took place in 2012 ("2012 Rule"), following the settlement of litigation arising from the 2005 rule.

Plaintiffs are businesses that own the land in San Diego County, California, including property on which is located a one-acre vernal pool that was formerly a cattle stock pond and is now home to endangered Riverside fairy shrimp. Based upon environmental surveys that showed that the filled stock pond contained adult Riverside fairy shrimp during the wet season and the dried-out bed of that stock pond had Riverside fairy shrimp cysts in it during the dry season, the FWS determined that this endangered species "occupied" the one-acre stock pond at the time the species was listed in 1993—a finding that this Court has already upheld. Id. at 59. In the 2012 Rule, the FWS proceeded to designate as "occupied" critical habitat for the Riverside fairy shrimp not only the stock pond itself, but also approximately 56 acres of surrounding land (which is referred to throughout this Opinion as "Subunit 5c" or "the Property"), and alternatively, the FWS labelled those same areas as "unoccupied" critical habit, for the purpose of the ESA. Id. at 52–53.4 Otay Mesa has plans to build a recycling center and landfill on the Property, and in the instant context, it represents that the FWS's critical habitat designation "may make the completion of this project infeasible." (Pls.' Mem. in Supp. of Summ. J., ECF No. 9-1, at 34.) Consequently, Otay Mesa has filed a complaint that contends that the FWS's designation of the one-acre vernal pool and the surrounding 56 acres of land as protected critical habitat under the ESA was an arbitrary and capricious determination, and was also contrary to law, in violation of the APA. See Otay Mesa Prop. , 144 F.Supp.3d at 39.

On September 30, 2015, this Court denied without prejudice the parties' initial cross-motions for summary judgment. Id. In so ruling, the Court found that Otay Mesa had standing to bring its lawsuit, and that the FWS did not act arbitrarily or capriciously with respect to either the economic analysis underlying the critical habitat designation or its decision not to conduct an analysis of the challenged critical habitat designation under the National Environmental Policy Act, 42 U.S.C §§ 4321 – 4370. See id. at 39. This Court further found that it had insufficient information to resolve the parties' dispute about the rationality of the scope of the FWS's critical habitat designation, because the Court could not "determine on the record before it whether the FWS has acted arbitrarily in concluding that 56 acres of land surrounding the one-acre pond is, in fact, watershed" for the pond. Id. ; see also id. at 39–40 (explaining that "the portion of the administrative record that was submitted to the Court does not explain how the FWS determined that all of the geographic area that it designated as critical habitat qualifies as such" (emphasis added) ). Consequently, the Court ordered the parties to file supplemental briefs that addressed the factual underpinnings for the FWS's designation of 56 acres of land as watershed for the one-acre pond, along with any additional supporting documents from the Administrative Record. (See Suppl. Br. Order, ECF No. 31, at 1–2.)

B. Current Proceedings

Defendants and Otay Mesa filed the requested supplemental briefs and renewed their cross-motions for summary judgment. (See Defs.' Suppl. Br., ECF No. 33; Pls.' Resp. to Defs.' Suppl. Br. & Pls.' Renewed Mot. for Summ. J., ECF No. 37.) The Court heard oral argument on the parties' renewed motions (Min. Entry of Mar. 15, 2017), and during the hearing, Defendants'...

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