5th Circuit Invalidates “Destruction/Adverse Modification” Standard of 50 C.F.R. § 402.02

The Gulf sturgeon was listed as a threatened species in 1991. This listing triggered the provision of the Endangered Species Act that requires the Secretary of Interior to “designate any habitat of such species which is then considered to be critical habitat.” [16 U.S.C.A. § 1533(a)(3)(A)]. The Orleans Audubon Society filed suit in federal district court, seeking to compel the Department of the Interior to decide whether to designate critical habitat for the sturgeon. The Fish and Wildlife Service (FWS) and the National Marine Fisheries Service (NMFS) decided not to designate critical habitat for the sturgeon, finding that it was “not prudent” to do so because designation would not provide any additional benefit to the sturgeon. Eventually, the district court found that the conclusions of the FWS and NMFS were “minimally rational” and supported by the best scientific evidence available. Sierra Club, which challenged the decision by FWS and NMFS, appealed the district court ruling to the Fifth Circuit Court of Appeals. The Fifth Circuit gave its decision in Sierra Club v. United States Fish and Wildlife Service, 245 F.3d 434 (5th Cir. 2001).

The challenge to the action of FWS and NMFS centered around the issue of whether 50 C.F.R. § 402.02 conflicts with the language of the Endangered Species Act. According to the Fifth Circuit Court of Appeals, the purpose of the Endangered Species Act is “to enable listed species not merely to survive, but to recover from their endangered or threatened status.” The Act requires federal agencies to consult with the Interior Secretary. If critical habitat has not been designated, an agency must consult with the Secretary where an action will “jeopardize the continued existence” of a species. Where critical habitat has been designated, the Act requires the agency to also consult if an action will result in the “destruction or adverse modification” of the designated critical habitat. The regulation in question, 50 C.F.R. § 402.02, defines both of these consultation scenarios in terms of the effects of the agency action on both the survival and recovery of the endangered or threatened species.

The Sierra Club argued on appeal that § 402.02 conflicts with the language of the Endangered Species Act, because § 402.02 requires that an action affect both survival and recovery, while the Act requires consultation where an action affects recovery alone. The Court of Appeals agreed. According to the Court, the Act defines “critical habitat” as areas which are “essential to the conservation” of listed species, and the language of the Act makes it clear that “conservation” includes both survival and recovery. Therefore, “[r]equiring consultation only where an action affects the value of critical habitat to both the recovery and survival of a species imposes a higher threshold than the statutory language permits.”

Having found § 402.02’s definition of the destruction/adverse modification standard facially void, the Court of Appeals turned to the issue of the correctness of the district court’s decision in favor of FWS and NMFS. The Court agreed that FWS and NMFS’s reliance on § 402.02’s definition of “destruction or adverse modification” in terms of both recovery and survival “went to the heart of its decision.” The Court noted that FWS and NMFS found that designation of unoccupied critical habitat was necessary to the recovery, not the survival, of the sturgeon. Also, FWS and NMFS’s decision was based on the view that jeopardy consultation was "functionally equivalent" to consultation under the destruction/adverse modification standard. Again, FWS and NMFS’s position was based on § 402.02’s definition of both consultations in terms of survival and recovery.

The Court also discussed the effect of § 402.02 on FWS and NMFS’s conclusions regarding the benefit of designating occupied and unoccupied critical habitat. FWS and NMFS concluded that designation of unoccupied critical habitat would only be beneficial for endangered, not threatened, species. According to FWS and NMFS, unoccupied critical habitat is not immediately required for threatened species because they are not currently at risk for extinction. Again, this conclusion was based, in part, on § 402.02’s definition of the destruction/adverse modification in terms of both survival and recovery.

The Court rejected Sierra Club’s argument that FWS and NMFS were required to consider the informational benefits associated with critical habitat designation. Although the Endangered Species Act ambiguously requires the Secretary to consider “any other relevant impact” of designation, nothing in the Act or its regulations specifically requires FWS and NMFS to consider informational benefits when rendering habitat decisions.

The Fifth Circuit Court of Appeals concluded that, because FWS and NMFS relied on an invalid regulation, 50 C.F.R. § 402.02, their decision was arbitrary and capricious. The Court remanded with directions to FWS and NMFS to reconsider their decision.