Monday's Big Environmental Decision -- NAHB v. Defenders of Wildlife:

The Supreme Court released another major environmental decision Monday, National Association of Home Builders v. Defenders of Wildlife (NAHB). As in Massachusetts v. EPA, environmentalist groups sought to expand the scope of a major environmental law, over the opposition of the Environmental Protection Agency. Also like Mass v. EPA, the Court split 5-4. Unlike Mass. v. EPA, however, the EPA and industry groups won while the environmentalist groups lost.

NAHB centered on whether the Endangered Species Act requirement that federal agencies consult with the Fish & Wildlife Service (or National Marine Fisheries Service) to insure that agency actions not threaten endangered and threatened species applies to non-discretionary agency actions. At issue was the EPA’s decision to approve the transfer of Clean Water Act (CWA) permitting authority to the state of Arizona. The CWA provides that the EPA “shall” transfer such permitting authority unless the EPA concludes that the state in question fails to meet one of nine specific criteria listed in the Act. Defenders of Wildlife and other environmentalist groups argued that the EPA was also required to consider whether the transfer of permitting authority could jeopardize endangered or threatened species under ESA Section 7(a)(2). As characterized by the Court, Defenders argued, and the Ninth Circuit held below, that Section 7(a)(2) “effectively operates as a tenth criterion on which the transfer of permitting power under the first statute must be conditioned.” Interestingly enough, the relevant federal agencies – the EPA, FWS, and NMFS – all took the contrary view.

The Court, in an opinion by Justice Alito, rejected the environmentalist argument, holding that Section 7(a)(2) of the ESA only applies to discretionary agency actions, and should not be read to modify existing agency statutory obligations. If the CWA provides that the EPA “shall” delegate permitting authority unless one of nine specific criteria is satisfied, then the EPA cannot consider – and is certainly not obligated to consider – other criteria not specified in the Act. Thus, Section 7(a)(2) imposes a broad mandate on federal agencies, but not a “super-mandate” that effectively amends existing statutory authorities. This interpretation of the ESA, the majority noted, was that embraced by the agencies entrusted with implementing the Act, and this interpretation was due deference from the Court. As Justice Alito concluded,

Applying Chevron, we defer to the agency’s reasonable interpretation of ESA §7(a)(2) as applying only to “actions in which there is discretionary Federal involvement or control.” 50 CFR §402.03. Since the transfer of NPDES permitting authority is not discretionary, but rather is mandated once a State has met the criteria set forth in §402(b) of the CWA, it follows that a transfer of [CWA] permitting authority does not trigger §7(a)(2)’s consultation and no-jeopardy requirements. Accordingly, the judgment of the Court of Appeals for the Ninth Circuit is reversed, and these cases are remanded for further proceedings consistent with this opinion.
In the course of his opinion, Justice Alito also took some shots at the Ninth Circuit’s opinion below, specifically noting that if the EPA’s decision to transfer permitting authority to Arizona had been arbitrary and capricious, as the Ninth Circuit held, “the proper course would have been to remand to the agency for clarification of its reasons. . . . But the Ninth Circuit did not take this course; instead, it jumped ahead to resolve the merits of the dispute.”

Justice Stevens wrote the primary dissent, arguing that the language and intent of the ESA required that it apply to all agency actions, even those otherwise constrained by statutory delegations of authority. The apparently conflicting language of the ESA and CWA could be reconciled, Stevens argued, without limiting Section 7(a)(2) to discretionary agency actions. Under this reading, Section 7(a)(2) grants federal agencies the authority to consider – indeed, obligates them to consider – factors that they would otherwise lack statutory authority to consider. This is a significantly broader reading of Section 7(a)(2) than courts and agencies have traditionally adopted. It is one thing to argue that Section 7(a)(2) requires all federal agencies to consider the impact on species – and avoid such impacts – when permissible. It is quite another to say that Section 7(a)(2) means that when a statute tells an agency “Do X unless you find A, B, or C,” an agency is also required to consider and act on “D.”

Justice Stevens approach to agency discretion here is also at odds with his approach in Massachusetts v. EPA. In NAHB, Stevens argues that the EPA’s “authority to transfer permitting authority” to states is “discretionary.” Although the CWA specifically enumerates nine criteria as potential grounds for the EPA to refuse to transfer permitting authority, Justice Stevens argues that the Act leaves the EPA ample room to exercise its independent judgment, and therefore including Section 7(a)(2) consultation does not alter the nature of the EPA’s authority under the CWA. In Mass v. EPA, however, Justice Stevens (correctly in my view) argued that the EPA could not justify a failure to regulate carbon dioxide as a pollutant based upon considerations other than those specifically mentioned in the Clean Air Act (CAA). Because the CAA specifically identified the criteria for the EPA to consider, it had to base its decision on an evaluation of such criteria. Yet confronted here with language in the CWA that is arguably more constraining than the relevant CAA provision, Justice Stevens argued that the EPA still had room to consider other factors – room that a straightforward reading of the CWA would seem to deny.


While the government's reading of § 287.6 may not be the most obvious one, we cannot say that it is plainly erroneous or inconsistent with the regulation. FN6

FN6. Cf. Gutierrez de Martinez v. Lamagno, 515 U.S. 417, 434, 115 S.Ct. 2227, 132 L.Ed.2d 375 (1995) ("Though 'shall' generally means 'must,' legal writers sometimes use, or misuse, ' shall' to mean 'should,' 'will,' or even ' may.' ").

Gui Cun Liu v. Ashcroft, 372 F.3d 529 (3d Cir. 2004) (Alito, J.)
6.27.2007 10:08am
U.Va. 2L:

I don't see the inconsistency between Alito's opinion in NAHB and what you posted. Sure, both readings of "shall" are reasonable, but at that point, isn't it the agency's call under Chevron?
6.27.2007 10:12am
I think Alito in III.A of Home Builders says that the "shall-could-be-may" argument is unreasonable and would knock out a "may" administrative regulation. To be fair, I only read the opinion very briefly, but I thought that was central to the holding.

"By its terms, the statutory language is mandatory and the list exclusive; if the nine specified criteria are satisfied, the EPA does not have the discretion to deny a transfer application."
6.27.2007 10:28am
Dave Hardy (mail) (www):
I find it hard to see a rationale for overturning agency action on the theory that the agency must do a 7(a)(2) analysis even where it has no discretion to change its actions based on that analysis. Even if that approach were correct, the agency action would stand, and the remedy would at most be to order it to undertake the analysis in addition.

I suppose one might analogize 7(a)(2) analysis to that of NEPA, where (in theory) all agency actions must be analyzed (even those having no possible environmental effects). But NEPA has the provision for categorical exclusion by an agency of listed activities, and thus each agency can list all decisionmaking that doesn't affect the environment (or does so only trivially) and exclude them.
6.27.2007 2:25pm
I don't know anything about this one, but that Massachusetts decision still irritates the heck out of me. I like Roberts' dissent... this guy is good:

To be fair, it is not the first time the Court has done so. Today’s decision recalls the previous high-water mark of diluted standing requirements, United States v. Students Challenging Regulatory Agency Procedures (SCRAP), 412
U. S. 669 (1973). SCRAP involved “[p]robably the most attenuated injury conferring Art. III standing” and “surely went to the very outer limit of the law”—until today. Whitmore, 495 U. S., at 158–159; see also Lujan v. Na-tional Wildlife Federation, 497 U. S. 871, 889 (1990) (SCRAP “has never since been emulated by this Court”). In SCRAP, the Court based an environmental group’sstanding to challenge a railroad freight rate surcharge onthe group’s allegation that increases in railroad rates would cause an increase in the use of nonrecyclable goods, resulting in the increased need for natural resources to produce such goods. According to the group, some of theseresources might be taken from the Washington area,resulting in increased refuse that might find its way intoarea parks, harming the group’s members. 412 U. S., at

Over time, SCRAP became emblematic not of the loose-ness of Article III standing requirements, but of how utterly manipulable they are if not taken seriously as a matter of judicial self-restraint. SCRAP made standing seem a lawyer’s game, rather than a fundamental limita-tion ensuring that courts function as courts and not in-trude on the politically accountable branches. Today’sdecision is SCRAP for a new generation.2

Perhaps the Court recognizes as much. How else to explain its need to devise a new doctrine of state standingto support its result? The good news is that the Court’s“special solicitude” for Massachusetts limits the future applicability of the diluted standing requirements applied in this case. The bad news is that the Court’s self-professed relaxation of those Article III requirements has caused us to transgress “the proper—and properly lim-ited—role of the courts in a democratic society.” Allen, 468
U. S., at 750 (internal quotation marks omitted).
I respectfully dissent.


And Scalia was surly that day, I see:

Once again, in the face of textual ambiguity, theCourt’s application of Chevron deference to EPA’s inter-pretation of the word “including” is nowhere to be found.2

[—————— 2Not only is EPA’s interpretation reasonable, it is far more plausiblethan the Court’s alternative. As the Court correctly points out, “allairborne compounds of whatever stripe,” ante, at 26, would qualify as“physical, chemical, . . . substance[s] or matter which [are] emitted intoor otherwise ente[r] the ambient air,” 42 U. S. C. §7602(g). It follows that everything airborne, from Frisbees to flatulence, qualifies as an “air pollutant.” This reading of the statute defies common sense.]

Evidently, the Court defers only to those reasonable inter-pretations that it favors.


The Court’s alarm over global warming may or may not be justified, but it ought not distort the outcome of this litigation. This is a straightforward administrative-law case, in which Congress has passed a malleable statutegiving broad discretion, not to us but to an executive agency. No matter how important the underlying policyissues at stake, this Court has no business substituting its own desired outcome for the reasoned judgment of the responsible agency.

6.28.2007 2:35am
Hokala (mail):
I find this opinion ignores Congressional intent in the Endangered Species Act and its passage decades ago. Protection of species was the paramount reason for the act to exist, and Congress clearly intended all federal actions to be addressed under Section 7 consultation requirments. This current version of the SC is clearly substituting its political philosphies in its rulings, the very definition of an activist court that folks like the Federalist Society publicly condemn. Of course, we all know that this is code for decisions reached favorable to the so called "left" or "liberal" side of the argument.

Having worked on delegation of EPA program issues for several years while practicing in DC, I can tell you that it is very difficult for a state to meet the requirements adequately, and environmental groups will be focusing on this process in addressing this particular issue. Discretion is one thing; winking at administrative and statutory requirements is quite another, and there is plenty of winking at EPA regulatory work groups.

As an aside, perhaps in 2008, where it is increasingly likely we will see bigger Democratic majorities in the House and Senate, the needed changes in the ESA can be made so instead of focusing on individual species, we can address problems based on an ecosystem approach that better reflects the current thinking of science.
6.28.2007 8:27am
Right. And since we've done such a great job on the discrete situations, and proven how well we can churn through those, let's now take all these proven understandings, and jump forward and address entire "ecosystems". We can model our efforts from the whole climate change dialogue and process, which thankfully has found absolute concensus in that broad area, and we should quickly be able to bring that same model to bear in this arena, and apply the necessary clarity and focus to our efforts... "the current thinking of science"... much like they have done so successfully. And Stevens has all the necessary data in his Mass. opinion, wo we're off to a great start. Plus he's got 4 other votes, in case anybody gets smart.

This is such fun!
6.28.2007 12:15pm